Permanent residency health insurance

So you've just got your permanent residency. Congratulations. Not only have you just got your future in Australia sorted, you're now able to get a regular health insurance policy.

This is good for a couple reasons. You now have much more choice and health insurance tends to be a lot cheaper tha overseas visitor health cover (OVHC).

Do permanent residents need private health insurance in Australia?

Private health insurance isn't mandatory for permanent residents. Australia has a public healthcare system called Medicare which gives you free access to medical services.

So why get private health insurance if you get healthcare for free? There's a few reasons:

• Avoiding paying the Medicare surcharge levy if you earn over $97,000 a year as a single
• Reduced waiting periods for specialist procedures and treatments compared to the public system
• You get to choose your own doctor and you can get your own private room

"I'm from the UK, so paying for health insurance is a pretty foreign concept to me. I took out health insurance though because my partner and I earned over the $186,000 MLS threshold. It's cheaper to have a policy than pay the surcharge."

Gary Ross Hunter

Editor, Insurance

• What is private health insurance?

  Private health insurance is a system where you subscribe to a private company that provides you with rebates known as benefits for particular medical costs. In general, private health insurance exists in two forms: hospital insurance and extras insurance.

  Hospital insurance covers in-hospital treatment by a doctor in a private hospital. It can also help pay for associated costs like accommodation, ambulance transport and prostheses. Usually, private insurance will let you choose your doctor and give you a private room to stay in while receiving treatment.

  Extras insurance helps cover non-medical health services, including things like optical, physiotherapy and dental.

How does Medicare work?

Medicare is the name of Australia's national public healthcare system. Under Medicare, you have access to free treatment at public hospitals as well as reduced costs when using a wide range of non-critical health services, like visiting a GP or having a routine eye examination by an optometrist.

Medicare also exists in the form of the Pharmaceutical Benefits Scheme (PBS), which regulates the price of certain prescription medications that may otherwise be unaffordably expensive. In many cases, the PBS may reduce a drug that costs hundreds of dollars to less than 50 for someone who has had it prescribed for them.

What health insurance do I need as a permanent resident?

As an overseas visitor up to this point, it's likely you'll have some form of Overseas Health Cover (OVHC) to save you from outrageous medical expenses while working in or visiting Australia. When you're a permanent resident, though, your healthcare benefits and entitlements change and it's likely that OVHC will either no longer apply or not be the best choice for you.

Once you have your residency, it's a great time to switch from overseas visitor cover to domestic health insurance. The good news is you'll also have a lot more choice.

As a permanent resident, you will automatically qualify for the public health system under Medicare. But, as mentioned above it might still be a smart idea to invest in private health insurance too.

Frequently asked questions

• Can I get insurance without Lifetime Health Cover loading if I've just got PR?

  If you're over 31 years old, you have a one-year window starting from the date you registered for your first interim (blue card) or full (green card) Medicare benefits. During this time, you can purchase private hospital cover without incurring a loading. It's important to note that the cost of insurance increases the longer you wait to purchase it after this one-year period. If you're under 31 years old, you have until the 1st of July following your 31st birthday to purchase private hospital cover without incurring a loading
  

• Are permanent residents eligible for the Private Health Insurance Rebate??

  Permanent residents are able to claim the private health insurance rebate, as long as they confirm with all of the eligibility requirements. Regardless of your residency status, you must have an eligible health insurance policy, be eligible for Medicare, and have an income less than the Tier 3 threshold.

• Can I get Extras insurance under Medicare?

  No, extras health insurance is not available through Medicare. You will have to purchase extras insurance through a health insurance provider.

Written by

Gary Ross Hunter

Editor, Insurance

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

Gary Ross's expertise

Gary Ross has written 644 Finder guides across topics including:

• Health, home, life, car, pet and travel insurance
• Managing the cost of living