What’s the difference between private health insurance and Medicare?

We answer the big question - Why private health cover?

06 September 2023 4 minute read

A young athlete grimaces as he lays on a running track

Whether it was to get a few stitches following a nasty bike stack, or a plaster cast after breaking a bone during a particularly good tackle at a footy game, we’ve all had a painful accident (or two!) that’s needed immediate medical care.

But, when it comes to more serious injury that might involve surgery or an overnight hospital stay, did you know that without private health insurance you could be waiting days, even months for treatment?

We break down the difference between Medicare and private health insurance and help answer the big question ‘Why should I get private health cover?’

If your medical condition isn’t life-threatening you may have to wait in a queue for months - or even longer

Medicare 101

In Australia, we’re lucky enough to have a public health care system – Medicare. The goal of Medicare is to give Aussies access to free or low-cost care for certain cases which might incur hospital, medical and pharmaceutical costs.

However, if your medical condition isn’t life-threatening, it means you’ll have to wait in a queue to be treated.

And that queue can leave you waiting months or even longer. Which isn’t ideal, especially if you’re in pain, or unable to work.

Under Medicare, you won’t be able to choose your doctor or the hospital you’ll be treated at. That means you and your family could end up having to travel long distances – and you might not be able to see the doctor you want.

A basketballer winces as he holds his knee while on the ground

So, why PHI (private health insurance)?

Private health insurance aims to fill in the gaps in Medicare and for many, it’s about minimising the time you have to sit on a public hospital waiting list.

For example: You injure your shoulder while surfing over the weekend and require surgery to be able to use it again. The only problem is that your surgery isn’t deemed ‘life threatening’, so you could be waiting more than two months. Not only are you potentially in a whole world of pain, but your job requires you to be able to use your shoulder – so you’re out of work until it’s fixed.

Having private health insurance means you could skip the queue, relieve your pain and get back to work much quicker. Without it, you could be up for a bill of more than $3,800 to self-fund your surgery*.

Another important benefit of having private health insurance is being able to choose your own doctor. So, if you need your shoulder operated on, you can opt for a surgeon who specialises in shoulders and works from the private hospital down the road.

Wondering how your private hospital journey differs from the public health system? Check out Private vs Public: A tale of two medical emergencies.

There are many more reasons why private health insurance is a smart option, from avoiding the Lifetime Health Cover Loading (LHC) if you are over 31 to the peace-of-mind in knowing you’re covered by nib’s accidental injury benefit. The best bit? You can get a quote in just a few minutes.

*Median cost according to nib claims data from 2022, including nib benefits and member out-of-pockets