Any recommendations on private health insurance? Never had it before but need to get it in the next month or two to avoid this Lifetime Health Cover loading kicking in. Male, late thirties, non-smoker, no major health issues FWIW. Guess I just want something basic.
Private Health Insurance
zfa on 06/05/2013 - 12:44
Comments
It is the lifetime loading not Medicare Surcharge I'm bothered about. I'm British and only got permanent residency and the associated right to Medicare last year. You have 12 months from the date of falling under Medicare to get private health insurance.
I'll check your list, thanks.
Do the maths…
If you're fit and healthy and don't "need" cover, the money you save (and don't spend) now more than covers the slight extra you might have to pay in the future until you come back to the full 30% rebate.
(at least that's the maths for me)Can you explain this 30% rebate? I thought I was going to get stung for the years over 30 I was but didn't see anything about this rebate. What is it?
Every year you're 31 or over you lose 2% of the 30% rebate that applies to all Private Health unless you hold Private Health Insurance at an appropriate level.
So, lets say you're 38. If you'd lived in Aus forever, you'd have lost 16% (8x2$) of the 30% rebate, ie you'd only get a 14% rebate if you started Private Health now.
(I don't know if you'll jump straight to only 14% rebate or if you only lose 2% in your first year of being an Australian)
The 30% rebate is generally already factored into the advertised price of cover you see on a billboard.You get back the full 30% after 10 consecutive years of holding cover.
Ah got it. I find all this terribly confusing. I had assumed the penalty was going to be applied to my premium but I get what happens now - they reduce my rebate by a commensurate amount. I do get hit with the total (age-30)x2% as soon as I've been on medicare without insurance for 12 months but didn't know that after 10 years you get the whole rebate (re)applied regardless. That's good to know.
Thanks for all your help.
I figure the sweet spot is somewhere around 40.
By that stage you're more likely to actually "need" Cover (but can still get away with cheaper basic cover) and the extra amount that you pay isn't outrageous. Meanwhile, you've saved ~10 years of "useless" Premiums, helping to pay down the mortgage faster.
And when you really start to need cover (50+), you get back to the full 30%.
I just want to correct some of what has been posted here… To my understanding there is no relation between the loading and the rebate.
If you do not have hospital cover with an Australian registered health fund on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30.
For example, if you take out hospital cover at age 40 you will pay 20% more than someone who first took out hospital cover at age 30. The maximum loading is 70%.
Once you have paid a LHC loading on your private hospital insurance for 10 continuous years, the loading is removed as long as you retain your hospital cover.
http://www.privatehealth.gov.au/healthinsurance/incentivessu…
Also it is my understanding that if you earn enough to be subject to the medical levy surcharge than it is a no brainer as hospital cover will cost you close to what the surcharge is.
To my understanding there is no relation between the loading and the rebate.
I'm not sure what you mean?
Taking the example from the website,
"For example, if you take out hospital cover at age 40 you will pay 20% more than someone who first took out hospital cover at age 30. The maximum loading is 70%."
To me, that reads "you get the full 30% rebate if you have cover from 30", but you only get a 10% rebate if you start cover from age 40" (Therefore you're paying 20% extra)You're correct that the MLS is another factor if you earn enough (I don't).
That's why I said do the maths.
If it is the lifetime loading you are worried about, and you are in your late 30s, that ship has sailed:
http://www.privatehealth.gov.au/healthinsurance/incentivessu…
If you mean you will be affected by the Medicare Levy surcharge (for singles earning over $84k), there are various products available that give you a low level of coverage, plus a high excess for slightly less than the levy would cost.
If you visit the insurer's site there is often an option phrased something like "I want to avoid paying extra tax".
Also, if you use a service like iSelect, be aware they only compare funds that offer them a kick-back, so proceed with caution.
If you want to be comprehensive, there is a list of every healthfund in Australia here: http://www.privatehealth.gov.au/dynamic/healthfundlist.aspx
Unfortunately, based on my research, the value they offer varies wildly, and will differ from individual to individual, so recommendations like e.g. "I think NIB is the best" are very subjective.