More and more millennials are turning their backs on private health cover and it actually might not be such a bad idea. For some, the idea of getting sick and needing treatment isn’t something they give much thought to because, let’s face it, you’d be considered a bit of a Debbie Downer if you raised the topic of illness and mortality with your friends over brunch. For others, they’re simply too busy with their families, careers or life in general to make time to organise private health cover. And then there are the ones who have made a conscious decision not to have private cover due to the fact that the premiums are escalating at a huge rate compared to wages. So you’re not alone if you’ve asked the question; do millennials really need private health cover?
Is private health cover essential?
Thanks to the Government’s lifetime health cover (LHC) initiative, if you don’t sign up for private health cover from the year you turn 31, you’ll receive a 2 percent LHC loading on top of your premium for every year you are aged over 30. The loading is eventually dropped once you’ve had the policy for 10 consecutive years but that’s still a huge penalty to pay for signing up over the age of 31.
So what happens if you fail to sign up before the age of 31 but want to later on in life? No drama! It just means you’ll be hit with the 2 percent loading, but there’s a huge possibility that you’ll end up paying less in the long run compared to someone who was paying premiums since their 31st birthday without making any claims.
Peace of Mind
You never know what’s waiting for you in the future so private health cover might bring you a lot of peace of mind for the security of knowing that, in the event of an accident or illness, you can choose your doctor and avoid any wait lists that the public system has; but the fact is that you are much less likely to be hospitalised in your 30’s than when you’re in your 50’s and above. Having said that, of course, being in your 30’s doesn’t mean you’re bulletproof, but it’s reassuring to know that Australia’s public health care system is one of the best in the world, and in the event of an emergency or serious illness, you’ll be treated at a public hospital, for free!
For fit and healthy millennials, they’re probably not going to get much value for money out of their private health cover unless they sign up for extras too. Extras provide a rebate for things such as optical, dental, chiro, physio and even lifestyle programs such as gym memberships, Pilates and yoga. Not making use of your hospital cover isn’t necessarily a bad thing though. If you’re getting peace of mind by knowing you’re covered and you avoid illness and accidents then you’re doing well.
So do millennials really need private health cover? It’s such a personal choice as to whether you think you and your family would benefit from having private health cover. Less and less people are taking up cover and it could prove to be a smart financial decision, but if they find themselves facing a long wait list for surgery, they just might wish they’d signed up. If you’re unsure as to how to proceed with making a decision regarding private health cover then it’s always a good idea to talk to an expert.