Private health versus Medicare

Hi

I'm really confused about whether or not to take out private health insurance. Is there someone unbiased I could discuss this with? I just don't understand what would be free with medicare. i.e ongoing hospital visits/treatments lets say if someone had cancer? I understand like the NHS that private generally means less waiting times for non urgent operations etc, but for accidents/injuries where you attend hospital via ambulance and need follow up care is this still free?

Thanks!

Yes, for accidents and injuries you will receive free care in the public hospital system - and also any other medical treatment you may require.

For non emergency or elective treatment you can still be treated for free in a public hospital but you may have to wait for treatment. Waiting times can vary tremendously depending on how well serviced/resourced the public hospital system is in your area.

It would probably be wise to have insurance for ambulance cover (depending on your state of residence...it is free in a couple but most charge).

Medicare is similar to the NHS.

What at is a good idea is extras cover. This is for ambulance as they are private and very expensive in some states - a very simple trip with no treatment cost me $700.

Extras also covers things like dental which is all private in Oz and can be very expensive.

Hi Trabonita, there are probably two issues here; 1) whether you require cover and 2) the tax implications.

We have just taken out a low level of BUPA cover that will have a certain level of extras, such as dentist and optometrist, but didn't really need a high level as all fit and healthy, with the kids too young at this stage for needing braces, glasses, etc.

Of a bigger concern was the tax implications - as we have arrived 4 months ago my understanding was that due to levels of income, if we didn't get a certain level of cover there would be a lifetime loading charge applied to my tax returns...therefore took it on the chin and got it sorted.

I had gone for a quote via Compare the Meerkat, got a call back and was talked through what our requirements were. She helpfully came back with a much cheaper quote than had intended, and she talked me thorough all elements.

Good luck

my understanding was that due to levels of income, if we didn't get a certain level of cover there would be a lifetime loading charge applied to my tax returns..

 

Yes, there is a Medicare Levy Surcharge applied to incomes over $90,000 pa. for singles, $180,000 pa. for couples who don't have private hospital cover.

So, for the OP, this should be taken into your calculations.

Yes, there is a Medicare Levy Surcharge applied to incomes over $90,000 pa. for singles, $180,000 pa. for couples who don't have private hospital cover.

So, for the OP, this should be taken into your calculations.

Its not exactly a 'lifetime loading' charge though,is it?If I remember rightly it only appies when income is over a certain level, and its not for life cos if income drops again you don't pay it. I know a lot of former workmates were weighing up the costs and worked out that not having coverage, and paying the surcharge instead, could well work out cheaper nowadays.

Its not exactly a 'lifetime loading' charge though,is it?If I remember rightly it only appies when income is over a certain level, and its not for life cos if income drops again you don't pay it. I know a lot of former workmates were weighing up the costs and worked out that not having coverage, and paying the surcharge instead, could well work out cheaper nowadays.

My understanding is that if you don't get medical insurance within the first year the levy is then applied forever...i.e. lifetime loading.

For us the medical cover was less than the 2% initial loading so was a no brainer!

Some exciting information if anyone is interested ;-)

http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealth-lhc-providers-faq.htm

Its not exactly a 'lifetime loading' charge though,is it?If I remember rightly it only appies when income is over a certain level, and its not for life cos if income drops again you don't pay it. I know a lot of former workmates were weighing up the costs and worked out that not having coverage, and paying the surcharge instead, could well work out cheaper nowadays.

The Medicare Levy and Lifetime loading are different things - as you rightly say the medicare levy is only paid when you're income is over that level. For us PHI was cheaper than the medicare levy.

The lifetime loading is a charge added to your PHI premiums if you take it out over 30 or within 12 months of arriving as an immigrant. This significantly increases the cost of PHI and is a deterrent against people not taking it out until latter in life when the likelihood of hospital treatment increases. Lifetime loading does apply 'for life' or until you cancel PHI of course.

The Medicare Levy and Lifetime loading are different things - as you rightly say the medicare levy is only paid when you're income is over that level. For us PHI was cheaper than the medicare levy.

 

The lifetime loading is a charge added to your PHI premiums if you take it out over 30 or within 12 months of arriving as an immigrant. This significantly increases the cost of PHI and is a deterrent against people not taking it out until latter in life when the likelihood of hospital treatment increases. Lifetime loading does apply 'for life' or until you cancel PHI of course.

Going through the details realise that Lifetime loading is removed after 10 years of continuous PHI coverage, so it can be undonw, but is time consuming and expensive ;-)

Going through the details realise that Lifetime loading is removed after 10 years of continuous PHI coverage, so it can be undonw, but is time consuming and expensive ;-)

Ah okay, thanks for the correction due to a cock up by HBF we ended up with lifetime loading and the difference was huge - ended up having to complain to the Insurance Ombudsman and it was sorted & refunded. I didn't know it would have eventually stopped after 10 years but it would have been an awful lot more money by then.

The Medicare Levy and Lifetime loading are different things - as you rightly say the medicare levy is only paid when you're income is over that level. For us PHI was cheaper than the medicare levy.

 

The lifetime loading is a charge added to your PHI premiums if you take it out over 30 or within 12 months of arriving as an immigrant. This significantly increases the cost of PHI and is a deterrent against people not taking it out until latter in life when the likelihood of hospital treatment increases. Lifetime loading does apply 'for life' or until you cancel PHI of course.

The lifetime loading is nothing to do with your tax though? Its just on the health insurance premiums I think. Its the Medicare Levy that is to do with the ATO.

So glad I'm back home, the NHS is so much simpler!

The lifetime loading is nothing to do with your tax though? Its just on the health insurance premiums I think. Its the Medicare Levy that is to do with the ATO.

 

So glad I'm back home, the NHS is so much simpler!

Yeah that's correct, the loading is nothing to do with tax.

@OP There are two government "incentives" to push people into private insurance. One is based on your age, the second on your wealth.

Age

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A sliding penalty loading which increases the cost of your private health insurance depending on how old you are, after 30 years of age, when you first take out private health insurance. It's stated purpose is to encourage people to not wait until they are old and unwell to take out private health insurance.

You are only penalised if and when you subsequently take out private health insurance; your premiums will be higher for 10 years.

If you stick with Medicare only you will not incur any penalty loading.

Wealth

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As stated if you earn over $180,000 as a family (or $90,000 single) you will incur an additional amount of tax if you do not hold private hospital insurance for the full year. Note this has nothing to do with the "extras" portion of any private insurance plan, only the private hospital cover.

If you earn under the thresholds this will not affect you.

Thank you everyone that has made it much clearer! I think we can easily manage with extras like ambulance cover and dental for now. Thanks again!