Should I buy health insurance?

VSPRY is all about helping you to save for your future health and wellness expenses. According to Choice, it can make sense to buy Hospital Cover for tax reasons, or to afford the private hospital treatment you want. That is why we have a Distribution Agreement with nib health funds limited, whom are trusted by over 1 million Australians for their hospital cover.

For singles earning more than $90 000 a year, and for families or couples earning more than $180 000, if you don't have Hospital Cover, you will pay more tax. For example, let's say you earn $110 000 a year and are single, you will pay an extra 1.25% or $1 375 extra in tax. You can buy a Hospital Cover policy for under $1 000, so straight away you save money, plus you get cover for some elective surgery events in the private system.

Hospital Cover

Australia has a universal healthcare system that was built on a foundation to help all Australians back to good health after sickness, illness, or injury. God forbid, but if you were to have a serious accident, you will get taken to a world-class public hospital and you should expect to get quality care and not have to pay a cent.

But what if you have a condition which is not an emergency, and you require surgery, such as a knee re-construction or removal of your wisdom teeth? You can get treated in a public hospital and have the bills paid for under Medicare, but the timing of your treatment will be prioritised according to the urgency, and the availability of hospital and health system resources in your local area.

This is where Hospital Cover may come in handy, allowing you to jump the queue. Governments' support queue jumping, because it takes pressure off the public system. Depending upon the type of procedure, you could save yourself anywhere from 30 days to 18 months. Be aware though, unlike Medicare where you don't have to pay a cent, you will have out-of-pocket costs if the surgeon and hospital charge more than the scheduled fee, plus you will have a hospital cover excess of $750.

Faster treatment

You definitely get faster elective surgery care by accessing benefits under a Hospital Cover product. But don't expect the care to be better. The standard of care for elective procedures is high in both the public system, and the private system. You do get to choose your practitioner in the private system, but the reality is you have very few means of reliably comparing the quality of care from one doctor to another. So, it is fair to conclude that whilst you get faster care in the private system, it is not necessarily better care.

Tax incentive

Even if you are happy to rely upon the public system for elective surgery, the Australian Government penalises you for not holding hospital cover if you earn above a certain threshold. If you are single and earn more than $90 000 a year, or a couple or family and earn more than $180 000 a year, it may make financial sense to buy low-cost hospital cover via VSPRY.

Eligibility

To take out Hospital Cover, you need to be listed on an Australian Medicare Card, or be entitled to one. You may be entitled if you are:

• a person who lives in Australia and
• an Australian citizen, or
• a holder of a permanent resident Visa, or
• a New Zealand citizen, or
• an applicant for a permanent resident Visa

For questions about Medicare eligibility, you should refer to the Services Australia website for more information.

Cover options

1. Basic Essential Plus

A basic level of cover which covers you for accidents, some specific hospital services as well as emergency ambulance. It is a great choice for your first health cover or families on a budget. It covers:

• Joint reconstructions;
• Dental surgery;
• Tonsils, adenoids and grommets;
• Hernia and appendix;
• Gastrointestinal endoscopy;
• Gynaecology; and
• Miscarriage and termination of pregnancy

2. Bronze Plus

A cover that includes more than just the basics, and covers you for more procedures than Basic Essential Plus including:

• Chemotherapy, radiotherapy and immunotherapy for cancer;
• Brain and nervous system;
• Bone, joint and muscle;
• Ear, nose and throat;
• Eye (not cataracts);
• Kidney and bladder;
• Digestive system;
• Lung and chest;
• Blood;
• Skin
• Pain management
• Male reproductive system
• Breast surgery (medically necessary)
• Diabetes management (excluding insulin pumps)
• Podiatric surgery (provided by a registered podiatric surgeon)

3. Silver Plus

An extensive level of cover that covers you for more procedures than Bronze Plus including:

• Dialysis for chronic kidney failure
• Implantation of hearing devices
• Pain management with device
• Heart and vascular system
• Joint replacements
• Cataracts
• Insulin pumps
• Sleep studies
• Plastic and reconstructive surgery (medically necessary)

Get covered

You need to have a Health Stash account first. Once you have opened your account, you can get a quote and get cover within the VSPRY app.

30 day cooling off period

If you aren't happy with your nib Hospital Cover product, you can contact nib on 13 16 42 to cancel your policy and get a refund of any premiums paid in the first 30 days, provided you haven't made a claim!

Ambulance cover

It might come as a surprise to many Australians, but Ambulance expenses are not covered by Medicare, and the way you can get Ambulance cover depends on where you live. By definition you can't really predict if or when you're going to need an ambulance, so it's worth making sure you're covered. The good news is, if you take out Hospital Cover, you get cover for Ambulance expenses - learn more.

Things to consider

Waiting periods

If you are purchasing hospital cover for the first time or upgrading your plan, you need to serve a waiting period before you can claim your benefits. During the waiting period, you do not receive any benefits for certain treatments or you receive lower benefits for a period of time.

Exclusions + gap payments

Depending on your level of cover, you may not be fully covered against all costs associated with your treatment and will have to pay some out-of-pocket expenses. A 'gap' is the difference between the amount you pay for medical and/or hospital charges, and your rebate from Medicare and/or the health insurer. Many private hospitals have arrangements with health insurers to fully or partially cover costs relating to hospital fees including accommodation, theatre, and labour ward fees. It is important to note that these agreements often exclude the fees charged by medical specialists and surgeons. Whilst the Australian Government sets the Medicare Benefits Schedule (MBS) fee for medical services provided by clinicians and surgeons, the Government does not set the actual fees they charge - they are free to charge more than the MBS fee. You may also have out-of-pocket expenses related to prostheses, and other services provided during your hospital stay, for example - gaps from diagnostic imaging, radiology, pathology and pharmaceuticals.

If you go to a hospital that does not have an agreement with the health insurer, you may face significant out-of-pocket expenses for your treatment. These out-of-pocket expenses are in addition to the policy excess you have to pay (usually $750). Before you go to hospital, you should ask the hospital, your medical specialist and the health insurer to find out exactly what is covered with your policy, and what you will need to pay for yourself. If you do not have hospital cover for a particular condition or medical service, you cannot claim the fees associated with your hospital stay for that treatment.

Learn more about gap payments.

Pre-existing conditions

Under the Private Health Insurance Act 2007, health insurers may impose a 12-month waiting period on benefits for hospital treatment for a pre-existing condition. Some important facts to remember about this rule:

• A pre-existing condition is defined by law as any ailment, illness, or condition that you had signs or symptoms of during the six months before you joined a hospital cover or upgraded to a higher hospital policy.
• It is not necessary that you or your doctor knew what your condition was or that the condition had been diagnosed. A condition can still be classed as pre-existing even if you had not seen your doctor about it before starting the hospital cover or upgrading to a higher hospital policy.
• The decision is made by a medical practitioner appointed by the insurer.
• In forming an opinion about whether or not an illness was pre-existing, the medical practitioner must take into account information provided by your own doctor.
• The health insurer will need time to advise you if your condition is pre-existing, so check with your insurer well before you go to hospital to make sure you are covered.
• Even if you have a pre-existing condition, the health insurer must allow you to purchase any type of cover, at the same price as any other person. Once you have served any waiting periods, you will be entitled to claim.
• The exceptions to the 12-month waiting period for pre-existing conditions are psychiatric treatment, rehabilitation and palliative care. These services have a two-month waiting period, even if the condition pre-existing. In some cases, you may be able to access an exemption to the two-month waiting period for upgrading psychiatric benefits - please contact the health insurer directly.

Australian Government Private Health Insurance Rebate

If you purchase hospital cover, you may be eligible to receive a rebate from the Australian Government to help lower the cost of your hospital cover premium. The rebate, known as the Australian Government Private Health Insurance Rebate (Rebate), is aged-based and income tested. The Rebate is available for people with Medicare eligibility. If you have a Lifetime Health Cover loading, the Rebate does not apply to the LHC loading portion of your premium. If you are eligible for the Rebate, you can have the Rebate automatically deducted off your premiums or claim it back at tax time.

For more information about the Rebate, please visit the Services Australia website. You can also calculate your individual Rebate by accessing the Australian Taxation Office’s Rebate Calculator website.

Medicare Levy Surcharge

The Medicare Levy Surcharge (MLS) is levied on payers of Australian tax who do not have private hospital cover and who earn above a certain level of income. Currently, the income threshold is $90,000 for singles and $180,000 for couples and families. To be exempt from the surcharge, your hospital cover must be held with a registered health insurer such as nib health funds limited and must cover some or all of the fees and charges for a stay in hospital.

For more information about the MLS, please visit the Australian Taxation Office’s MLS website.

Lifetime Health Cover loading

The Lifetime Health Cover (LHC) loading is a Government initiative designed to incentivise Australian residents to take out, and maintain private hospital cover earlier in life. To avoid the LHC, you need to take out Hospital Cover before 1 July, following your 31st birthday. If you haven't taken it out by then, if you take out Hospital Cover later in life, the LHC adds an extra 2% loading to the cost of your premium, for every year you don't have private health insurance after this date. The maximum loading is 70%. Any LHC loading will be removed after you have completed 10 years of continuous cover. If you are a couple or a family, your loading is calculated as an average between the individual loading of the two adults. For example, if one person has 20% loading and the other person has 0% loading, the loading applied to the couple’s policy is 10%.

Think about your healthcare needs

You should review your hospital cover from time to time to ensure it still meets your needs. If the premium has become a concern for you, there are a number of ways you may be able to manage your policy and lower costs. If you already have private health insurance, you can also consider moving to a different insurer.

Overseas students

If you are a student from overseas on a temporary student visa it is a condition of your visa to maintain adequate health insurance for the duration of your stay in Australia. This means you need to purchase a policy such as nib Overseas Student Health Cover (OSHC) and keep your policy up to date whilst you are in Australia and holding a student visa. OSHC assists international students to meet the costs of medical and hospital care they may need while in Australia. OSHC also includes ambulance cover and limited pharmaceuticals.

Overseas visitors

If you are visiting Australia and hold a temporary visa you should consider taking out nib Overseas Visitors Health Cover (OVHC). If you need to visit a doctor or stay in hospital while you are here you could find yourself responsible for the full cost of treatment, which can be very expensive. In some cases you may be required to take health insurance as part of your visa conditions - for example, students are required to take Overseas Student Health Cover (OSHC). Applicants for working visas, such as subclasses 482 (Temporary Skill Shortage) or 485 (Temporary Graduate), are required to take OVHC that meets certain requirements. Other visitors may also be required to take OVHC.

If you are a recent migrant to Australia with permanent residency or you have applied for permanent residency, you are generally eligible to apply for interim or full Medicare benefits and gain immediate access to health care services. You can also purchase residents' private health insurance via VSPRY.

Important documents

nib Fund Rules

If you are considering purchasing or have purchased Hospital Cover, which is arranged by VSPRY with nib health funds limited, the Fund Rules set out:

• the requirements for all members of nib;
• the rules regarding payment of benefits by nib; and
• the ways in which nib will conduct the Fund and make decisions regarding all members.

The Fund Rules should be read in conjunction with the Product Guide, and the Policy Booklet.

nib Policy Booklet

This Policy Booklet is designed to help you understand what you will be covered for, if you are considering purchasing or have purchased Hospital Cover, which is arranged by VSPRY with nib health funds limited. The document should be read in conjunction with the Product Guide, and the Fund Rules.

nib Product Guide

If you are considering purchasing Hospital Cover, which is arranged by Vspry with nib health funds limited, this Product Guide helps you to better understand the product features and the levels of cover. Please note that VSPRY does not offer all levels of cover (e.g. VSPRY does not offer Gold Top Hospital, or Silver Hospital). The document should be read in conjunction with the Fund Rules, and the Policy Booklet.

nib Direct Debit Agreement

This Direct Debit Service Agreement applies to VSPRY customers whom elect to take out Hospital Cover via Vspry with nib health funds limited. It helps you to understand the responsibilities (both yours and that of nib) and other terms and conditions that apply to your direct debit request. These terms apply to both debits from an Australian bank account and payments from a credit card (where both are referred to below as a 'direct debit' or just a 'debit').

VSPRY Help Centre

Browse our FAQs and articles in the VSPRY Help Centre.