Reciprocal Health Cover, Private Insurance, & Medical Levy Surcharge

[kamb1ng]

Hello, I'm moving to Melbourne next month from the UK and a bit confused about the rules regarding Medicare, private health insurance, and MLS exemption.

• I'm moving with my family on 482 TSS visa.
• I'm a UK citizen so can get Medicare.
• I will be earning above the MLS income threshold.

Questions:

1. I assume I should apply for Medicare the moment I land? Is there any downside of getting Medicare?
2. Since I will be getting private health insurance anyway, what type of cover should I get to avoid having to pay MLS?
3. Should I be getting a specific type of Overseas Visitors Health Cover? I'm worried that I could get an OVHC product that doesn't actually exempt me from MLS

Many thanks in advance.

[Marisawright]

Yes you should claim Medicare, there are no downsides.   Overseas Visitors Health Cover is pretty much the same whichever company you choose.  I don't know whether it exempts you from MLS.

[VERYSTORMY]

I don't know if it is still the case, but BUPA were the only ones that provided cover for temp visa holders that met the requirements for tax

[Ken]

4 hours ago, Marisawright said:

Yes you should claim Medicare, there are no downsides.   Overseas Visitors Health Cover is pretty much the same whichever company you choose.  I don't know whether it exempts you from MLS.

The guidance on the Australian  Tax Office Website seems to suggest that if you have an overseas health insurer you will not be exempt but if you have an Australian insurer it will be a complying health insurance policy. It's not really that simple however so but I'd always ask the Australian insurer just to make sure their scheme is a complying health insurance policy. A complying health insurance policy must cover Hospital admissions so a policy that only covers outpatient services (such as Doctors fees), or "Extras" as they are normally referred to in Australia, will never be a complying health insurance policy even if it is from an Australian insurer.

As Verystormy has mentioned BUPA advertise a policy specifically for Overseas Visitors who have access to reciprocal health cover  https://www.bupa.com.au/health-insurance/cover/overseas-visitors/reciprocal-health-cover which does provide an exemption to the Medicare Levy Surcharge but I don't know if other insurers have anything similar or not.

Note that it is only the Medicare Levy Surcharge that you are exempted from. Because you are entitled to Medicare (whether you choose to register for it and use it or not) you still have to pay the Medicare Levy.

I would also recommend paying for Ambulance Insurance (unless you are moving to Queensland or Tasmania where it's free). Ambulance Victoria charge just under $100 per year (levied quarterly) for a family. If uninsured a road ambulance can easily cost you $900 and an air-ambulance thousands. While worrying about whether or not you are having a heart attack you don't want to be stressed about how much calling an ambulance will cost!

[Collie]

All the big health insurers will offer Overseas visitor policies, it is an extremely profitable product for them (I used to work for 1 of the big 4).

As said above it exempts you from the surcharge (only levied if you earn over a certain amount, it's about $90k for a single) but not from the normal medicare levy.

[VERYSTORMY]

1 hour ago, Collie said:

All the big health insurers will offer Overseas visitor policies, it is an extremely profitable product for them (I used to work for 1 of the big 4).

As said above it exempts you from the surcharge (only levied if you earn over a certain amount, it's about $90k for a single) but not from the normal medicare levy.

Most policies do not exempt a temporary visa holder from the surcharge. 

[Collie]

16 minutes ago, VERYSTORMY said:

Most policies do not exempt a temporary visa holder from the surcharge. 

Not true mate.

Even a basic hospitals policy exempts you.  It is a key feature.

I worked for one of the large health insurers for a while a few years back (and looked specifically at this product at the time).

[Collie]

Also Ambulance cover is included as a benefit on most hospital policies.

You can buy ambulance only cover (quite cheaply) if you don't have a hospital policy.  Has no impact on the medicare levy surcharge (neither does extra cover btw).

[kamb1ng]

Thanks for all the replies. Sounds like Medicare enrollment has no downside so I will go ahead and do that.

Collie and Verystormy disagreed on whether OVHC will exempt me from MLS or not. I also struggle with this because there is conflicting information out there. I want to get good private health insurance product but also want to make sure it gives me exemption from MLS.

I found this information at: https://www.iselect.com.au/health-insurance/tax/medicare-levy-surcharge/

Quote

To avoid the Medicare Levy Surcharge, or be eligible for a Medicare Levy Surcharge exemption as a high income earner, you need to have the right level of hospital cover from a registered private health fund for you, and your dependents.

This fund needs to have a total yearly front-end deductible or excess no higher than $500 for singles, or $1,000 for families and couples. This means if you make multiple hospital claims in a year, the excess you pay can’t be more than $500 for singles and $1,000 for couples.

 

Is that the answer? I need a cover with total excess no higher than $1,000 for families?

Thanks again.

[Collie]

2 hours ago, kamb1ng said:

Thanks for all the replies. Sounds like Medicare enrollment has no downside so I will go ahead and do that.

Collie and Verystormy disagreed on whether OVHC will exempt me from MLS or not. I also struggle with this because there is conflicting information out there. I want to get good private health insurance product but also want to make sure it gives me exemption from MLS.

I found this information at: https://www.iselect.com.au/health-insurance/tax/medicare-levy-surcharge/

 

Is that the answer? I need a cover with total excess no higher than $1,000 for families?

Thanks again.

Just ask the question of your PHI.  Get them to confirm it.

It will probably be in the t's & c's

The big PHIs are

Medibank (different to Medicare)

Bupa

HCF

NIB

HBF (WA based)

HCF & HBF are member owned funds, (ie no shareholders).

 

I'm open to correction but I believe VeryStormy has been based in the UK for about 5 years now.

[AussieMum]

8 hours ago, Collie said:

Also Ambulance cover is included as a benefit on most hospital policies.

You can buy ambulance only cover (quite cheaply) if you don't have a hospital policy.  Has no impact on the medicare levy surcharge (neither does extra cover btw).

Be wary of relying purely on private health insurance ambulance cover.  With a small number of companies/policies, you take out your own ambulance membership and they reimburse the cost to you, which is great as you have full coverage.

Others, however, only cover "emergency" ambulance and the insurer decides if they think it was an emergency or not, eg, no cover if you're being transferred from one hospital to a specialised spinal or trauma unit.

One ambulance trip is easily in the thousands if you have to go more than a few km and for air ambulance you can be looking at the tens of thousands (20 years ago it was in the region of $5000+ just for the airwing to take off).

[kamb1ng]

After some more research and chat with BUPA, it's clear that I need to buy 2 different covers to get MLS exemption:

1. Private medical cover
2. Reciprocal health cover - this is the necessary cover to get MLS exemption

Anyway getting MLS exemption is a moot point now because BUPA's quote for Reciprocal health cover is around $2200 while the MLS is $1800. So I will pay the MLS instead.

So now I'd like to understand what private medical cover is actually necessary for someone with Medicare. I know I want to get the "extras cover", which includes dental, optical, and also definitely Ambulance cover. But for the rest it's not clear to me whether I need any or not. For example is it easy enough to get GP appointment using Medicare like an NHS GP in the UK? 

My family is generally quite healthy. The only ongoing thing is asthma control for my daughter and wife.

What's the best way to know if private medical cover is suitable or not?

Any suggestion highly appreciated. 

[AliQ]

Private HOSPITAL cover is, in a nut shell, a fast track way to have surgery or to see a specialist. In other words, avoid waiting lists, avoid admission to a public hospital (for elective procedures) you can choose your Dr / surgeon, private hospital and admission date. It's a personal decision and also depends if you can afford it or not. Also, as a private patient, in a private hospital, even with top cover, you may still have some out of pocket expenses to pay ( called a gap) and they can be significant. 

As for seeing a GP, based on my experience currently in UK, it is so much easier to get an appointment in Australia ! There is usually a fee to see a GP in Australia, the government only pays in part. There are bulk billed GP practices around, but those are not the norm (not where we lived anyway)

If you decide to take out private hospital cover, shop around, it's big business. It may pay you to join CHOICE Australia, they are very active in reviewing private hospital polices at the moment, it's not easy to compare policies, it's a complex industry.

 

[Marisawright]

4 hours ago, kamb1ng said:

After some more research and chat with BUPA, it's clear that I need to buy 2 different covers to get MLS exemption:

1. Private medical cover
2. Reciprocal health cover - this is the necessary cover to get MLS exemption

Anyway getting MLS exemption is a moot point now because BUPA's quote for Reciprocal health cover is around $2200 while the MLS is $1800. So I will pay the MLS instead.

I think the BUPA person you spoke to is confused. It makes absolutely no sense. 

I suggest ringing some of the other health funds (most of whom don't even offer the Reciprocal policy and yet, still offer MLS exemption). BUPA is a fairly new and small player in the Australian market.

 

Edited January 19, 2020 by Marisawright

[Marisawright]

4 hours ago, kamb1ng said:

So now I'd like to understand what private medical cover is actually necessary for someone with Medicare. ....But for the rest it's not clear to me whether I need any or not. For example is it easy enough to get GP appointment using Medicare like an NHS GP in the UK? 

My family is generally quite healthy. The only ongoing thing is asthma control for my daughter and wife.

What's the best way to know if private medical cover is suitable or not?

It's a condition of your 482 visa to take out a policy.  I believe it is possible to let it lapse after you arrive - don't ask me how that works!

Many Australians have private health cover but it's not to cover GP or specialist visits - for Australians, it's not possible to get cover for those things. Cover is available for hospital treatment and extras only. 

In Australia, doctors (GP's and specialists) are not employed by Medicare.  They are all independent and decide what fees they want to charge.  Medicare will only reimburse a fixed amount.  You pay the doctor, then claim back the fixed amount.    The difference is called the "gap" (and like I say, for Australians there's no mechanism to cover that - you just have to wear it).

Some large GP practices "bulk bill",  which means they only charge the Medicare fixed fee. and they don't charge you - they bill the Government direct, in bulk.   They make that decision because although they are being paid less, they don't have to handle money and they don't need so many support staff.  

 

[kamb1ng]

2 hours ago, Marisawright said:

I think the BUPA person you spoke to is confused. It makes absolutely no sense. 

I suggest ringing some of the other health funds (most of whom don't even offer the Reciprocal policy and yet, still offer MLS exemption). BUPA is a fairly new and small player in the Australian market.

 

Yeah it doesn't make sense either especially because the Reciprocal Health Cover gives me zero additional benefit. The only benefit is to get MLS exemption. This is corroborated by this post from back in 2016:

 

[Marisawright]

21 minutes ago, kamb1ng said:

Yeah it doesn't make sense either especially because the Reciprocal Health Cover gives me zero additional benefit. The only benefit is to get MLS exemption. This is corroborated by this post from back in 2016:

 

Yes, but that post only talks about BUPA and that was several years ago.  I think it would be worth talking to other health funds.  Although BUPA is big in the UK, it's a new, small player in Australia and not well regarded. 

[Collie]

9 hours ago, Marisawright said:

Yes, but that post only talks about BUPA and that was several years ago.  I think it would be worth talking to other health funds.  Although BUPA is big in the UK, it's a new, small player in Australia and not well regarded. 

Marisa, I agree with your point re BUPA's information.  Doesn't make sense to me.  Most PHI hospital policies will exempt you from the surcharge.

However they are far from a small player in the market, they would be 1 or 2 (with Medibank) in terms of market share (c. 25%) and have been operating in Australia for close to 20 years.

[Loopylu]

It appears that you have to take out private health cover as a condition of your visa.  However, if this were not the case, it may still be cheaper to pay the MLS than pay for hospital cover health insurance, particularly if you have a family.  In my view, private health cover in Australia is a huge rort compared to what you get in the UK where my employer paid for my private health. In the UK there was a small annual excess on my BUPA cover.   In Australia, The health insurance rarely covers full procedures and people can be several thousand dollars out of pocket.  We were $1000 out of pocket for an ingrowing toe nail where our son required surgery under general anaesthetic. Out of pocket for ENT procedures for young children can cost several thousand and when you get onto cancer, don't ask!!!  We have ditched hospital cover (and kept extras - ie dental, optical) and now use the public system.   My husband has had two knee replacements on Medicare and we can't fault the results compared to friends who had private surgery and complications.... He is also very well cared for in the public system for his chronic kidney disease.

Personally, I wish Australia would adopt an NHS system where more is covered but the negative nellies in the British media who are always dissing the NHS convince Aussies that the NHS is not as good.  My Aussie MIL waited 5 years for a hip replacement and only got it because she managed to fall and break her hip.... I have never heard of anyone waiting that long in the UK.

There is not much in the way of dentistry here for the poor or low income earners. If you are lucky enough to live in a major city, then if you are poor you can go to a dental training hospital and let the students treat you or otherwise you pay through the roof.  There are no capped payments like in the NHS for dentistry and even the health insurance only covers so much. The cost of braces for children will set you back around $8000 per child. 

Even if you are on NewStart (ie Universal Credit) or an aged pensioner, you still have to pay a small amount for prescriptions and other routine screening procedures.  Often poor people here choose between food and medication. For the wider population, if your prescription is on the PBS then you can pay up to a cap of $36 per prescription. depending on how much the medication costs. 

My advice is tofactor health care costs (particularly dentistry if your kids have bad teeth) into your budget....

[kamb1ng]

Thank you that is very helpful.

One follow up question, what documentation do we need to bring when we apply for Medicare? Is a British passport and visa approval documentation sufficient or do we need things like EHIC card? I have NHS number but not on any card/paper.

Thank you.

[Collie]

9 hours ago, kamb1ng said:

Thank you that is very helpful.

One follow up question, what documentation do we need to bring when we apply for Medicare? Is a British passport and visa approval documentation sufficient or do we need things like EHIC card? I have NHS number but not on any card/paper.

Thank you.

Google is your friend and you would be better getting info directly from the medicare website (dept of human services) than from the randomers on here.

[Loopylu]

It's over 10 years since we applied for our Medicare cards but I don't remember being asked for an NHS number.  I remember we had to sign a statutory declaration for some bizarre reason. Aussie bureaucracy loves stat decs….

[ali]

On 19/01/2020 at 01:52, Collie said:

Just ask the question of your PHI.  Get them to confirm it.

It will probably be in the t's & c's

The big PHIs are

Medibank (different to Medicare)

Bupa

HCF

NIB

HBF (WA based)

HCF & HBF are member owned funds, (ie no shareholders).

 

I'm open to correction but I believe VeryStormy has been based in the UK for about 5 years now.

Our hospital cover with medibank means we don't pay the levy

[Marisawright]

16 minutes ago, ali said:

Our hospital cover with medibank means we don't pay the levy

But, @ali, don't you have PR?  The OP is coming on a 482 visa, which means they can't get the hospital cover that ordinary Australians get.  They have to take a different type of policy especially for temporary visa holders.  It's not clear whether that type of special cover qualifies for exemption from the Medicare levy.

Edited January 24, 2020 by Marisawright

[ali]

10 hours ago, Marisawright said:

But, @ali, don't you have PR?  The OP is coming on a 482 visa, which means they can't get the hospital cover that ordinary Australians get.  They have to take a different type of policy especially for temporary visa holders.  It's not clear whether that type of special cover qualifies for exemption from the Medicare levy.

Sorry you're right, i'm a citizen and misread the OP