If you can't afford it then fair enough. But if you're already paying huge amounts for PHI then it seems reasonable to use it. You don't get charged more but at least you know that your money is actually being used by the hospital. Basically when you sign that form the hospital bills your PHI instead of Medicare. The money then goes directly back into the hospital to be used for things they need.
It would be great if all rooms were private but most wards only have a handful. To be honest not once have I put a patient in a single room simply because they are a private patient. There is always a long line of people who actually require it for their health or to protect others from infection.