Why do I need private health insurance?
Private health cover helps fill in the gaps Medicare leaves
If you’ve been admitted into a public hospital, should you use Medicare, or your insurance?
It’s a topic that can be confusing at times, so we’re keeping it simple by giving you the facts – that way you can make up your own mind.
If you’ve been admitted into a public hospital, whether you’ve had an accident or emergency, one of the first questions the administration staff might ask is whether you want to use your private health insurance.
Public hospitals operate on a budget that’s set by the State Government and some governments even have a quota for how many insured patients they treat. Admitting private patients could give public hospitals the opportunity to secure extra cash flow.
It’s a big decision to make during a potentially painful and stressful time, which is why it’s so important that you have all the information beforehand.
One of the biggest misconceptions when it comes to being admitted is that you MUST use your private health insurance. Under the National Health Reform Agreement, ‘eligible persons are to be given the choice to receive, free of charge as public patients, health and emergency services of a kind or kinds that are currently, or were historically provided by hospitals.’
So, the truth is that it’s completely up to you whether you make use of your insurance, or whether you opt for Medicare in the public system.
Some public hospitals might offer you a few ‘bonuses’ if you use your private health insurance to get treated. This could be free newspapers and TV access and different meal options. You might also have the option to choose your doctor – but this is all dependent on your condition, the size of the hospital and whether the doctor has practising rights at the hospital.
You can also request to have a private room, however, priority for private rooms will always be given to patients who need them, so it’s really all down to availability.
The National Healthcare Agreement states that the health system ‘provides all Australians with timely access to quality health services based on their needs, not ability to pay, regardless of where they live in the country.’ So, ultimately, you will receive the same treatment in a public hospital regardless of whether you opt to use your private health insurance or Medicare.
When you use your private health insurance in a public hospital, Medicare and your insurer will cover the Medicare recommended fee (MBS fee) for the doctor or specialist providing your treatment. However, you may have to pay your insurance excess. Other hospital charges like accommodation and theatre fees are likely to be covered under your insurer, provided the treatment is covered on your policy, but you should always check your nib cover before going to hospital in Online Services or by calling 13 16 42. On top of this, your doctor might also charge a higher fee for being a private patient, which isn’t covered by Medicare and may not be covered by your health insurer.
However, if you opt for Medicare, all your hospital costs as an in-patient will be covered so long as they are clinically necessary.
If you opt for Medicare, all clinically necessary hospital costs as an in-patient will be covered
Private health insurers pay out about $1 billion dollars a year to public hospitals – a figure which accounts for approximately 6% of premiums.
With the amount of private patients being treated in a public hospital doubling since 2008-2009, it means that private health insurance policyholders are helping to fund public hospitals, despite already contributing to the public system through their taxes.
This practice, which has been labelled as ‘cost-shifting’, was the subject of a recent budget submission by Private Health Care Australia. The submission reported that “public hospital cost shifting to health funds adds more to premium costs than the average year’s premium increase.”
When you’re considering whether or not to use your private health insurance in the public system, there are a few questions to ask the hospital administration:
Once you’ve had these answered, you can make an informed choice based on your personal circumstances.
If you have any questions about going to hospital, call 13 16 42 to get advice from the nib team.
While you’re here, check out article Is surgery always necessary? To cut or not to cut.