As Aussies, we’re all aware Medicare and private health insurance are the two key ways to pay for our healthcare. Self-insurance is far less commonly discussed in the healthcare space. What is it and why should you care about it?
Today we’re going to shed some light on this third option to look after you and your family’s health needs.
Medicare generally doesn’t cover costs associated with dental procedures, most elective medical procedures, such as cosmetic surgery, and stays in hospital as a private patient. This is often the reason why people take out private health insurance.
Taking out private health insurance means you do not have to pay the Medicare levy surcharge at tax time. However, the ongoing cost of private health insurance can get expensive, especially if you are under 40 and single.
However it’s important to understand if you are considering this as an option that health setbacks can happen. Also after age 30 there is a loading for every year you delay taking out private health cover.
What is Self-insurance?
Self-insurance is an alternative to private health insurance. Rather than paying a premium to a health insurance provider, self-insurance means you set aside the money to cover health costs yourself.
Where you do need to pay for a health related cost, you will have to pay for the treatment out of your own pocket. However, if these costs never arise, you pocket the savings – you are your own insurer.
Pros and Cons of Self-insurance
The pros of self-insurance are largely cost related. You only pay for health costs you actually incur, which could mean hundreds of dollars of savings annually.
The cons include needing to be diligent in ensuring you have enough money saved for a ‘rainy day’ (or an elective medical or dental procedure). Self-insurance is also most appropriate when you have few health issues and do not expect any surprise health events. Private hospital stays can get incredibly expensive.
Often, a mix of private health insurance for hospital cover and self-insurance for electives and ‘extras’ may be the most financially prudent combination.
How MediPay can help
MediPay can help where you have a shortfall or where neither Medicare or private health covers the procedure or treatment you are after, such as cosmetic procedures.
Our payment plans* break down the total cost of your procedure or treatment into smaller, more affordable, fortnightly or monthly repayments. Furthermore, we do not penalise you for early repayment so any rebate you get from either Medicare or private health can be used to pay off your loan earlier.
With MediPay you can choose any doctor, dentist and vet in Australia (as long as they are appropriately registered to practice in Australia), giving you an incredible breadth of choice in regards to how to look after you and your family’s health.
Interested to see if you are eligible? Check your eligibility today.