Control the controllables: why health insurance is more important than ever

Emma Pawlowski’s belief in the importance of health insurance stems from her own experiences. A few years ago, her best friend—a first-time mother—was just six months into her exciting journey of motherhood when she began struggling with a “really sore leg”.

While the complaint sounded innocuous, the pain continued and tests confirmed the worst. She was diagnosed with a very aggressive form of bone cancer in her thigh.

With a tiny 6-month-old baby, Emma's friend’s life turned upside down. She was now facing nine months of chemotherapy, followed by major surgery to remove and replace a large piece of her femur bone with new bone from a generous donor. Her ordeal was further complicated by the fact that she didn’t have adequate health insurance.

“In absence of health insurance, I helped raise $30,000 to contribute towards her medical costs, which meant she could choose the medical team and specifically the particular surgeon that specialised in these types of bone cancers,” explains Emma.

“My friend is now, thankfully, in remission and has adequate health insurance. With appropriate cover, she has peace of mind that her young family is covered and she is supported through her continued rehabilitation.”

Peace of mind in challenging times

Since becoming Australian Unity’s General Manager of Healthcare Management & Product, Emma has found that these stories are all too common. Emma  has  navigated many health issues herself, “I have had my own experiences, from sporting injury surgeries, to a two-decade  journey with endometriosis,” she says.

Learning to manage her condition reinforced the value of having a sufficient level of health insurance, enabling access to the required care, faster, and by the specialist or surgeon of her choice. Additionally, the benefits of Extras, has meant access to adequate rehab, as well as additional support to prevent future medical events and maintain a healthy and active lifestyle.

These benefits, Emma adds, take on even greater importance if you have a family of your own. “You’re not only gaining these benefits as an adult, your children also benefit,” she says.

Emma’s reflections feel timely in the current economic climate, where the cost of living continues to spiral in the wake of successive interest rate rises, mounting inflation and the aftershocks of COVID-19. Such conditions have piled financial pressure on Australian households, with many of us urgently seeking ways to cut costs.

In this context, you’d expect to see many of us deciding to reduce our health insurance expenses. Intriguingly, however, the opposite is happening.

More of us are prioritising our health

A recent update from Private Healthcare Australia found that more than 865,000 people have signed up for private health cover since mid-2020—and this is growing. Some of the main reasons for this increase is a desire for shorter waiting times, greater certainty on the cost of treatment, the quality of private care, as well as being able to choose the specific place of treatment or specialist. 

Perhaps surprisingly, 20- to 49-year-olds are among the cohort embracing private health insurance in more significant numbers—which, traditionally, hasn't been the case. But now, it seems, this age group is becoming more mindful of their health and craving the peace of mind that health cover can bring.

“I think what’s driving the increase in private health insurance is probably the challenges hitting the front-page news around the public hospital system, and the timeliness and surety of treatment when people need it,” says Rebecca Windsor, CEO of Health Insurance for Australian Unity. “That’s the big driver of the uptake in private health insurance, despite the cost-of-living challenges people are facing.”

With lingering concern about the impact of COVID-19 on public hospital care and escalating competition to access mental health and dental treatment, we’re increasingly willing to pay for the convenience to control our health.

It’s a finding reinforced by Australian Unity Wellbeing Index research, which has seen an unprecedented drop in our satisfaction with our physical and mental health over the past two years. With our health playing a critical role in our overall wellbeing, it's little wonder that people are actively looking for solutions to the situation.

We're looking for ways to find value

With the cost of living starting to bite, we're also looking for ways to get better value from our expenses.

As many of us begin our yearly grapple with our tax returns, Rebecca makes the timely reminder that private health insurance may help us to avoid getting slugged with the Medicare Levy Surcharge. This additional tax amounts to between 0 percent and 1.5 percent of your income, and may need to be paid if you earn over $93,000 (for singles) or $186,000 (couples and families) and don't have private hospital cover.

“You could theoretically just pay the tax,” says Rebecca. “Or you could actually get some value from that tax by purchasing private health insurance.”

Another financial incentive is the Lifetime Health Cover loading, a policy introduced by the government to encourage people to take out private hospital insurance at a younger age and maintain it over time. Once you turn 31, you have until the following 1 July to buy private hospital cover. Failure to do so exposes you to extra loading fees. For every year you delay, you may have to pay an additional 2 percent (up to a maximum of 70 percent) on top of the cost of your private hospital cover.

“A lot of government incentives are put in place to drive behaviour that will keep the system sustainable,” says Rebecca.

Many health funds are also working hard to support their customers by keeping a lid on rising premiums. Over the past two years, increases in average premium costs of private health insurance have remained well below the rate of inflation.

“At Australian Unity, we've deferred our premium increases on two occasions for our members to help them with the cost of living, and we've also supported people through times of hardship,” shares Rebecca.

We're finding health insurance that matches our needs

Funds like Australian Unity are also developing new health insurance products to meet the specific demands of the here and now. With children increasingly leaving home later in life, for example, Australian Unity has introduced a new insurance feature. “If you're under 31 and not married or in a de facto relationship, you can now remain on your parent’s policy,” says Rebecca.

This allows younger people to maintain health cover at a point in their lives when they might otherwise allow it to lapse. In turn, this means they can avoid waiting periods which could potentially be on the table if they rejoined an insurer after dropping their cover.

Australian Unity has also developed Essential Choice (Bronze Plus) for younger people who are relatively healthy but want peace of mind and great value for money. “It’s a good, straightforward ‘just in case’ cover for simple and common procedures, including unlimited emergency ambulance transport and a wide range of Extras,” says Rebecca.

With so many options available, you now have a better chance than ever of finding a healthcare package that's right for your individual situation and budget.

Putting ourselves first

If the pandemic years have shown us anything, it’s that our health matters. More and more of us are finding ways to prioritise our health, even as the purse strings tighten.

“People need to really think about their situation and reflect on what’s most important to them,” says Emma. “Think about the times that you need to look after yourself and the benefits of being able to have that choice. Caring about your health is about putting yourself in the best position.”