Public healthcare vs private health insurance

In Australia, the health system comprises of two sectors: Medicare (public health) and private healthcare. Medicare is a nationwide healthcare initiative that offers free or subsidised medical treatment, while private healthcare offers access to a wider range of medical services and some advantages (like jumping the queue for elective surgery) at a cost.

The public health system

The Australian public health system operates under the name of Medicare, and it's a universal healthcare scheme that ensures we all get access to basic care including:

  • free treatment as a public patient in public hospitals
  • free or subsidised treatment by some doctors (eg. General Practitioners)
  • subsidies on some treatments by participating specialists, optometrists and dentists (eg. free eye checks)
  • free tests and examinations including x-rays and pathology tests

Medicare does not provide cover for out-of-hospital treatments like physio, chiro, most dental treatment, optical appliances, podiatry, psychology etc.

Private health insurance

With private health insurance, you can be treated as a private patient in a public or private hospital. The benefits of this can be significant, including:

  • your choice of hospital and doctor within the hospital
  • shorter wait times for surgery and greater flexibility in scheduling procedures
  • cover for your doctors' fees and hospital costs including accommodation and theatre
  • increased likelihood of having your own room to recuperate

Private health insurance can also provide cover for ancillary (out-of-hospital) services that Medicare doesn't cover, like:

  • physiotherapy and chiropractic
  • glasses, bifocals and contact lenses
  • dental treatment
  • psychology
  • hearing aids and other medical appliances
  • acupuncture, remedial massage and other alternative therapies

What are the main differences?

Some of the main differences between public and private healthcare are:

  • Public healthcare is free and accessible to all while private healthcare is only accessible for those who are willing to pay.
  • As a public patient, you can only go to a public hospital and you can't choose which doctor will treat you or when you'll be seen. As a private patient you can choose to go to a private hospital and you can even choose your doctor within the hospital.
  • If your case is life-threatening, your procedures will generally take place immediately regardless of whether you're a public or private patient. However, if the procedure is not life-threatening, it will be considered elective and as a public patient you may need to wait months, if not years, before surgery. As a private patient, you can jump the queue and be scheduled much faster, often even having the flexibility to choose a time that suits you.
  • Public healthcare does not include any ancillary treatments, but depending on the policy that you hold private healthcare provides cover for some, if not all, of these costs.

Should I take out private health cover?

Taking out private health insurance is a personal choice, but it's one that's encouraged by the Australian Government, which provides incentives including:

  • a rebate on the cost of your premium (the % of rebate is based on your age and taxable income)
  • guaranteed lowest premium if you take out cover early in life (Lifetime Health Cover)
  • avoidance of extra tax in the form of the Medicare Levy Surcharge if you take out private hospital cover (applicable income thresholds change every year)

In Australia there are many health funds you can choose from, each offering a range of policies. It's not too hard to find one that meets your health needs and suits your budget. If you decide that health insurance is for you, apply online or contact us today on 13 55 55 and let's talk about how we can help you.

These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.