From Money Magazine, May 2005
With premiums for private health funds going up yet again, the big question is still whether you can afford not
to be in one. In other words, take the risk and hope that what you save in premiums will cover you anyway.
After all, under Medicare all Australians are entitled to free medical treatment at a public hospital. But if you need surgery that isn't immediately life threatening, you may have to wait quite a while under the public health system.
The truth is, as Paul Clitheroe writes in the May issue of Money
, it's not really possible to pinpoint when you'll need medical care or how much that treatment will cost.
Modern medicine is making tremendous advances but it all comes at a cost. If you get seriously sick you could face huge bills you can't handle.
On the other hand private health insurance is an extra cost that families or young couples saving for a home might find difficult to cope with. So if you think you'd better join up, it pays to shop around.
The best approach is not necessarily to go for the cheapest premiums but to look for a policy that will give you peace of mind. And check that the fund you fancy is registered under the National Health Act. Most are, but if your choice is not, you won't be eligible for the government's 30 percent rebate on the premiums you pay.
Choosing a policy with a "co-payment" option can reduce premiums. This involves contributing to the cost of your treatment. But the co-payment can be around $80 a day so be sure you can pay it if the need arises.
And don't pay premiums that cover services you won't need. Young families, for example, are unlikely to need hip and knee replacements an older person can probably live without obstetric cover.
Clitheroe concludes that if your lifestyle, age or personal or family history make it possible you could face expensive medical procedures in the future, it would definitely be wise to take out health insurance.
And with medical costs going through the roof, he says, for something other than the most basic of procedures it is difficult to see how most of us could either save for or pay off the costs involved.
For the complete story see Money Magazine's May 2005 issue. Subscribe now.
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