Private Health Insurance in Australia: Is It Actually Worth It?

Private health insurance in Australia can feel confusing, overwhelming, and expensive, especially when you’re not even sure what you’re paying for or what you need. 

In this episode of Get Rich, Molly Benjamin is joined by private health insurance expert Kat Day to break down when private health insurance is actually worth it for Australians, and when it genuinely isn’t.

We talk about why so many people are over-insured, how women end up paying for cover they’ll never use, and how insurance premiums quietly creep up year after year without anyone noticing.

In 15mins you’ll learn:

• When private health insurance is worth it and when it’s not
  
• The difference between hospital cover and extras (and which to prioritise)
  
• How the Medicare levy surcharge actually works
  
• Whether it’s cheaper to pay the levy or take out private cover
  
• Why being on “gold” doesn’t mean better service
  
• How often you should be reviewing your policy
  
• The most common ways Australians overpay for health insurance
  
• Why switching providers won’t reset your waiting periods
  
• What ambulance cover actually looks like state by state
  

This is a practical, no-jargon episode designed to help you make smarter decisions, save money, and finally understand your private health insurance. Need to review yours? Click here. 

General information only. This episode does not constitute financial advice. Always consider your personal circumstances.

CHAPTERS

00:00 – Welcome to Get Rich
00:01 – Why you’re probably overpaying for private health insurance
00:02 – What we’re covering today (hospital, extras, Medicare levy, waiting periods)
00:03 – Meet Kat, private health insurance expert
00:03 – When private health insurance is actually worth it
00:04 – Hospital vs extras, what’s the real difference?
00:06 – Medicare Levy Surcharge explained (and income thresholds)
00:07 – Is it cheaper to pay the levy or get private cover?
00:08 – The biggest mistake people make, paying for cover they’ll never use
00:09 – Pregnancy cover and the 12-month waiting period
00:10 – Ambulance cover by state, what’s included and what’s not
00:11 – Real savings stories, how much people can actually save
00:12 – Waiting periods myth-busted, switching does NOT reset them
00:13 – What to review this year so you stop wasting money
00:14 – Adding a baby to your policy, what to do after birth
00:15 – Family cover vs singles cover, what’s smarter?
00:16 – How comparison services get paid (and why it’s free)
00:17 – Put this at the top of your life admin list

LINKS FROM THE EPISODE

Review your Health Insurance here
ATO: Medicare Levy & Medicare Levy Surcharge: Medicare levy surcharge income, thresholds and rates | Australian Taxation Office
 

CONNECT WITH KAT DAY

Website: https://choicey.com.au/ 
Instagram: https://www.instagram.com/choicey.au
Facebook: https://www.facebook.com/p/Choicey
TikTok: https://www.tiktok.com/@choicey_health

CONNECT WITH LADIES FINANCE CLUB

Join our free Facebook group - Ladies Finance Club Money Chat
Website: https://www.ladiesfinanceclub.com/
Instagram: https://www.instagram.com/ladiesfinanceclub/
LinkedIn: https://www.linkedin.com/company/ladies-finance-club/

TAKEAWAYS

• It's always nice to have someone else do the work for you.
• You don't want to be living with a hernia or in pain for years on end.
• It's more so being covered for things they don't need a lot of the time.
• You never want to prematurely pay for a service you may never end up using.
• If anything's changing in your life or if your needs have changed, that's the time to review and compare. 

SOUND BITES

"It's always nice to have someone else do the work for you."
"It's about that quality of life."
"You can move around and you're not losing all that history of cover."

TRANSCRIPT

[00:00:00] Molly: Welcome to Get Rich, the podcast that helps you do just that. Get rich and stay rich. Hey, I'm Molly Benjamin. I'm the founder of Ladies Finance Club, one of Australia's largest financial education platforms for women. But before I started helping thousands of women take control with their money, I was a hot financial mess when it came to my own finances and not the fun kind of hot, more like crying in a supermarket, wondering where all my money went kind of hot.

[00:00:29] But here's the thing, if I can go from financial mass to owning a share portfolio, investing in property, and building wealth. Then you can too. My mission is simple to make women rich because when we have financial freedom, we have choices, confidence, and control over our future. Every week on Get Rich, I sit down with some of the best experts in the industry to break down how we can all start investing, growing our money, and creating long-term financial security without the jargon, boring bits or overwhelm.

[00:01:02] Because when women get rich, we don't just change our lives. We change the world. So if you're ready to start making some smart Money moves, hit that subscribe button and let's get Rich together.

[00:01:15] Hello and welcome back to another episode of Get Rich. If you haven't reviewed or negotiated your private health insurance in the last 12 months, there's a very good chance you are overpaying and most people have no idea.

[00:01:27] So private health insurance in Australia can be a little bit confusing when you're working out. What do you actually need and what don't you need? And usually once it's set up, it's completely forgotten about while premiums quietly creep up year after year. So in today's episode, I wanted to get a private health insurance expert on, we've got cat day to actually break down when private health insurance actually makes sense and when it genuinely doesn't and how to avoid overpaying for cover you'll never use.

[00:01:56] And we're obviously talking about private health insurance, which can be like, not like the most exciting topic on people's list. So I was like. Kat, can we like compact this? Let's get this done. People have got limited time to listen to insurance, so we're gonna be uncovering things like hospital versus extras, how the Medicare levy surcharge actually works, and whether it's cheaper to pay the levy or hold private cover.

[00:02:19] Why being on like a gold. Premium membership doesn't necessarily mean better services. And why? And this is an important one, why switching providers isn't gonna reset your waiting periods. 'cause I know a lot of people put off changing insurers because they're like, oh, what about my waiting periods?

[00:02:35] Anyway, listening to this episode, if you want help. Reviewing your cover. I'll pop a link into the show notes where you can get a free insurance review and they'll look across a range of different brokers in Australia and find out what you need and what's be best for your situation. Also, if you do end up switching and you save money, let me know.

[00:02:55] I just love hearing how much money the community is saving. I got a real kick out of it. Alright, let's jump into today's episode. Hi Kat. Welcome to the podcast.

[00:03:06] Kat: Hi. Thanks. Great to be here.

[00:03:09] Molly: Now I'm obviously a big fan of what you guys do because I know when I first started looking for private health insurance, I was like.

[00:03:16] Like, what am I even looking for? I don't know. Yeah. Like do I need physio? Do I need this, do I need that? So I love that there's a place now we can go where you guys ask us all the questions and then you can compare the different brokers. 'cause it's a bit of a minefield out there.

[00:03:32] Kat: It truly is. It's always nice to have someone else do the work for you, right?

[00:03:35] Molly: Absolutely. You don't have to pay for it. So what I wanted to just have a quick chat about today is like. When is private health insurance actually worth it for Australians and when is it genuinely not? So

[00:03:48] Kat: it's really determined by a person and and how their life is. Right. So honestly like hospital cover, it's so much more worth it nowadays, especially since COVID like what you will find a lot of the time and a lot of stories that I hear is like the public system are putting people off potentially years, like up to like five years to go get a surgery.

[00:04:09] And it's just about that quality of life. Like you don't wanna be living with a hernia or in pain for years on end, and then it can interrupt your day-to-day life as well. So it is handy to have in that scenario. But in terms of like extras, again, that's just by the person. Like it depends on if they're, if they're gonna use them, then it makes sense.

[00:04:33] If they're already using the services, it's gonna save them money. Right, and that's what we uncover. Like when we speak to our customers, we wanna make sure that we're ultimately tailoring it to make it worth their while so they can go, oh, that's what I'm paying each month for.

[00:04:50] Molly: How often do you actually find that people have got extras that.

[00:04:54] Number one, they just don't need Or that, yeah, like I know when I was speaking to one of your team members, they were saying women having pregnancy cover when they're in their fifties and clearly not gonna have kids. Like, do you find that happens a lot that people are just have too much cover

[00:05:09] Kat: a lot, a lot of the time, so we wanna make sure that people aren't over insuring themselves.

[00:05:14] Yeah. Again, it's that justifying what you're paying each month for. The amount of times the misconception that most people have thinking that if they're on gold, they're gonna get a better service and that's not the case.

[00:05:26] Molly: Yeah.

[00:05:26] Kat: Also, a lot of the time it's just becoming complaints and or overwhelmed by looking around.

[00:05:33] Yeah. But people just go, oh, this is too hard. I'm just gonna keep paying what I'm paying and are wasting quite a bit of money.

[00:05:40] Molly: I noticed that insurance premiums are going up like every year. But when I switched, I saved so much more. I saved 350 a year just by switching, and I was getting the exact same thing.

[00:05:53] Kat: Yeah. And it's so important to stay on top of it, and that's why choice is here. Yeah. To make it easier to look around and to save money. And keep tailoring it as your life changes as well.

[00:06:04] Molly: Yeah, and just for those people listening, this is not sponsored by Choi. I'm just a really big fan of the work they do.

[00:06:11] Totally. So how do we know whether it's cheaper to take out private health insurance or just keep paying the Medicare levy surcharge? And for someone who's like. Sorry, one of these things, could you just maybe break down how it works?

[00:06:25] Kat: Yeah, so if you earn over a certain amount of money, so on a single income, if you're earning over $101,000 a year, you are then having to pay an additional surcharge at tax time.

[00:06:38] So some people can pay up to 1.5% of their gross annual income, and you're actually getting nothing in return for that. So by taking out hospital cover, it can be any level of hospital cover from basic to gold and you won't have to pay that surcharge anymore. So it makes sense to pay for something and get something in return rather than just handing it over to the government.

[00:07:03] You know what I mean?

[00:07:04] Molly: Yeah, absolutely. And I guess if you are below that, that's when you have to think about, okay. Is it worth it for me? And I have to say, what I really like about your company as well is we've had a few people, they've turned away because they're like, look, it's just not worth it. You should just stay on the public health system.

[00:07:22] But if you earn over this amount, that's when we'll be looking at kind of making that switch for you, which I really appreciate that honesty as well.

[00:07:30] Kat: Yeah, we're not going to put someone on something they don't need. It doesn't make sense. That's not the service we're here to do. We just wanna make sure that people are protecting themselves financially and health wise.

[00:07:41] Right?

[00:07:42] Molly: Yeah. So what do you think if someone can only afford one hospital covers or extra? What do you think they should prioritize?

[00:07:51] Kat: Honestly, it's a case by case basis.

[00:07:54] Molly: Yeah.

[00:07:54] Kat: Like it depends on like if it's someone that's going and seeing a physio and doing lots of massages or needs lots of dental work, probably extras is a bit more important because they can save money by doing extra.

[00:08:08] For me personally, hospital was most important for me. Like I had basic hospital cover and I all of a sudden needed a procedure and I was looking at waiting for five years for it. Oh, wow. And that just wasn't gonna be conducive to my lifestyle. Right. So I took out hospital cover, and a year later I got the procedure done and I'm all good.

[00:08:31] So I, I'm so glad that that was my priority at that time. And like I said, it's all case by case, right? So it depends on what's happening in your life. Life changes rapidly, so

[00:08:43] Molly: yeah,

[00:08:44] Kat: it's always good to be prepared for what's around the corner.

[00:08:47] Molly: And I know even when I was looking at pregnancy cover, I had a conversation with one of your team members and he was like, look, you need it for 12 months.

[00:08:55] Are you looking to get pregnant within 12 months? And I was like, yeah, I am. And he is like, well, probably, you know, you won't be able to claim on it, which I didn't realize. So that was such a, I'm so glad I had that conversation opposed to just going off and getting it. Otherwise I would've been in for a little shock and not a happy one.

[00:09:11] Uh, could you just explain as well, 'cause I've heard of this, but you'll definitely know the answer. With ambulance cover, is that covered under hospital? And if you don't have like basic hospital cover, is that ambulance covered in every state and territory?

[00:09:26] Kat: No. So well, it is covered in your hospital cover and it can be covered under your extras cover as well.

[00:09:32] So only in Queensland and Tasmania. Is our ambulance covered automatically through the government scheme. So by doing this cover, you're protecting yourself for emergency ambulance in all other states. So that's another perk of having it. Just that peace of mind. 'cause you don't wanna be having to pay thousands of dollars when you've just needed to use an ambulance.

[00:09:54] 'cause that's stressful enough as it is. Right.

[00:09:56] Molly: So if I didn't have private health cover and I was in Victoria, new South Wales, I called an ambulance, would I be out of pocket for that ambulance?

[00:10:04] Kat: Yes.

[00:10:05] Molly: Wow. See, I don't think many people know that because that is like, you just think ambulance is being like, call emergency, call an ambulance.

[00:10:13] Kat: Yeah. They'll come get me, but then they'll charge you thousands of dollars.

[00:10:17] Molly: Yeah. Gosh. Okay. Good one for people to know. Yeah. And what do you think and what do you see, do you think is the most common way? Overpay for private health insurance without realizing it. Yeah. Is it not negotiating and just like the premiums keep going up, or is it more being covered for things they don't need?

[00:10:33] Kat: It's more so being covered for things they don't need a lot of the time. That's what I see day in and day out, and again, to reviewing it regularly, having it tailored and restructured to suit your needs because it's not gonna be your forever policy when you take one out. It's something you wanna review regularly and make sure that you are changing it to what you are needing in the next year or two.

[00:10:58] You don't wanna be thinking 20 years down the track because you're not gonna use that service for 20 years. Yeah. So you never wanna prematurely pay for a service. You may never end up using it.

[00:11:09] Molly: Yeah, no, absolutely. And. On average, what do you find? You guys can save people because we've been putting it out there and really encouraging our LFC followers to switch or to at least call you guys up, see if they can find a better deal.

[00:11:24] The highest amount one of our ladies saved was $4,000 a year because she'd been on the same. And with the same healthcare provider for 20 years. Yeah. And so she was like, oh my God. Wow. What other kind of, I guess, success stories have you hear or heard from people just switching.

[00:11:44] Kat: Like one yesterday actually, I spoke to a lovely lady in WA and they were paying for absolute top, top cover.

[00:11:53] She's, they were in their sixties, like they don't need pregnancy and everything like that. And it was just that kind of fear, like what happens when I move? And I was able to show her that like I saved her three and a half thousand dollars.

[00:12:09] Molly: Wow.

[00:12:09] Kat: And I showed her, and look, you can move around. And you're not losing all that history of cover.

[00:12:16] You're not losing all those waiting periods. You're just fattening your wallet basically.

[00:12:22] Molly: Yeah. Can you just explain that waiting period? Because I've had a lot of people be like, oh, I don't wanna switch because I'll lose out on my waiting periods.

[00:12:30] Kat: Never. So you're always guaranteed continuity of cover. No Health insurer is gonna make you re-serve a waiting period that you've already served, and we make sure that we take care of all the paperwork so that you are protected in that.

[00:12:43] Molly: Love that. Yeah. And I guess if someone already has private health insurance, what's one thing they should do this year to make sure they're not wasting money?

[00:12:51] Kat: They definitely need to look at what they're using and how they're using it. One thing that I say to all my family and all my friends, when you claiming, just pay attention to how much you're paying out of pocket.

[00:13:04] Molly: Yeah.

[00:13:05] Kat: And look, we are here, we're a free service. It doesn't take long. It helps to have an expert look over your policy and go through it with you just to make sure it is the right one for you. Yeah,

[00:13:18] Molly: yeah. Also, I had a lot of questions as well around like. Loading waiting times, and you guys were able to answer that.

[00:13:25] Otherwise, I would've been really lost. I would've been like, chat GBT,

[00:13:30] Kat: answer these questions

[00:13:31] Molly: for me, answer these questions. And I guess my final question, because it's very relevant to where I am being 37 weeks pregnant when I have my little girl, hopefully in the next. Few weeks or sooner, will she automatically go onto my policy or do I need to add her to my policy?

[00:13:47] Kat: You'll need to add her to your policy. It depends on who you're with. Some funds have different rules around, it could be a month to three months to add her, but she'll be covered straight away. There's no waiting period

[00:13:59] Molly: if that's good. And if my partner and I were then to go, okay, let's go on a family plan.

[00:14:04] Do you generally save more being on a family plan as opposed to individual or, again, it's very dependent on. The insurer.

[00:14:11] Kat: Yeah, it, it's dependent on you as a family as well. If your needs are very similar, then definitely we would look at doing a family, but we always try to think outside the box on how can we get this soap the most cost effective way for you.

[00:14:25] Molly: Yeah.

[00:14:25] Kat: And whenever life changes. So bringing Bub into the world, that's when it's a good time to review and compare your cover. Yeah. Because your needs are gonna be completely different now. Yeah. So, and that's my rule of thumb. I tell everyone that like, if, if anything's changing in your life or if your needs have changed, that's the time to review and compare.

[00:14:45] Mm-hmm. Because you've got a better opportunity looking at other providers, you can ultimately tailor it better. 'cause you've got thousands of plans instead of just. A few that your current insurer have,

[00:14:56] Molly: and I guess if you're in your twenties and thirties, what you need to be covered for is gonna look very different for if you're in your, like your fifties and sixties.

[00:15:04] Kat: Correct? Yeah. Yeah. And like my case as well, like I was early thirties, I'm now towards the end of the thirties and I've had to change my cover like in the last two years just due to that. Right? Like I'm a bit of a, a comparison. Craze. I like to do it regularly for all of my insurances. Um, yeah, me

[00:15:27] Molly: too.

[00:15:28] Kat: Yeah. Yeah, because it honestly, we will work so hard for our money. Yeah. It's so important that we're not overspending on these sorts of things. Right.

[00:15:37] Molly: Totally. And complete side note, and not really relevant to this conversation, but I've got an investment property and I looked at like my home insurance and to be with the exact same insurer they made me.

[00:15:50] Like I did all the comparisons online and I'm like, same insurer online. 300 cheaper a year. Yeah. I just called them up, I was like, can I have it? And they said no. And I said, can I cancel my policy and reapply for it? And they said yes. So it's just like, it really does like. Like it's so important to shop around, ask the questions, get the professional help when you can.

[00:16:13] And if people are just wondering like, okay, this sounds a bit too co be true, how do you guys get paid? So you get paid by like all brokers, you get paid by the insurer.

[00:16:24] Kat: Correct. Yep. So we have the exact same pricing as what you have when you go to fund, direct to fund. So there's absolutely, like we don't mark up anything.

[00:16:33] Basically the insurers are paying us to work for you. That's the way it should work and it works out great for our customers 'cause they're able to get that free advice and they know that we're not gonna be biased towards, yeah. A particular fund. 'cause there's no kind of like kickbacks or anything like that from each fund.

[00:16:53] Yeah. We just simply wanna make sure that we're helping our customers in and putting them into the right plan.

[00:16:59] Molly: Awesome. It's such a win-win. So ladies, you've not negotiated on your health insurance this year, please make sure you reach out to choice. I'm gonna pop their links in the chat and you can also go via our Instagram link bio and let me know how much you end up saving.

[00:17:14] 'cause I get such a kick every time someone messages me and they're like, I save $400. I saved $600. I actually sent my sister to you guys and she saved hundreds, so she was loving it. So yeah, no thanks for all the great work you guys do.

[00:17:27] Kat: Yeah, that's why I love it. That's my every day when someone saves money, you're just making their day.

[00:17:32] I get a kick all day every day.

[00:17:35] Molly: Awesome. Well, ladies, that was your 1 0 1 health insurance. Thanks for listening. So ladies, if you haven't yet, make sure you put this on the top of your life admin list at the very top. And again, let me know how much you end up. Saving. All right, we'll see you next week.

KEYWORDS

private health insurance, Australia, health insurance tips, Medicare levy surcharge, health insurance savings