Medicare Levy Surcharge Is a Scam

random12 on 17/07/2022 - 18:10
Last edited 17/07/2022 - 18:12

If ever anyone needed a reason to hate getting a raise, it is the medicare levy surcharge (and other scams like Lifetime Health Cover loading).

Why are there these policies to prop up an industry (health insurance) that should just die?

Make everything public. Extend medicare to everything. If need be, increase the standard medicare rate.

The policy does not even achieve its goal of 'taking pressure off the public system', because people just buy a rubbish policy that covers nothing, and still go public.

Is nothing short of the neighbour shakedown. Forcing people to pay money to a corporation for crap they dont want. Great business model for health insurers. They have a constant stream of customers paying $900 (close to the min of the medicare levy surcharge - mmm how convenient) and they never claim

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Comments

  • DemocracyManifest on 17/07/2022 - 18:15
    +3

    The levy is fine; I’m sure if dental is eventually thrown in no one will complain even if it’s increased a little bit - and I agree the health insurers shouldn’t be allowed to produce junk policies that only exist to save money on a tax return. I was going to spec savers for example and I was sold 2x pairs of glasses I didn’t even need according to OPSM recently…a basic private healthcare plan is pointless when you are still relying on the public health system anyway

    • random12 on 17/07/2022 - 18:17
      +15

      The standard medicare levy is 2% of income and is for everyone.

      They then have a 'medicare levy surcharge' that is an extra (above the standard levy) 1 - 1.5% of income for people with income > 90k that do not buy a scam ripoff health insurance policy.

      I have no problem with the base 2% levy (which already guarantees that someone with a higher income pays more). But I hate being forced to buy policies I don't want, by the 'levy surcharge' which is essentially government funneling customers to the health insurance industry.

      • SlickMick on 18/07/2022 - 13:09
        +1

        The levy is only for higher income households, so is part of the "make those that are successful compensate those that aren't" strategy, which I thought most people support.
        (Personally I'd scrap all taxes except mining etc and GST and let everyone pay their own share… not sure what to do with all the redundant public servants though.)

        If you don't like private health, pay the levy.
        If you'd rather increase the tax and remove the levy, just add them together and call them a tax.

        Your complaint seems pretty insignificant if I understand you correctly. (And we need to have a peace about the things we aren't going to change.)

        • cheekymonkey on 19/07/2022 - 09:45

          I think you mean the surcharge- not the base levy.

          • SlickMick on 19/07/2022 - 12:54

            @cheekymonkey: Oh the terms are levy and surcharge - I've been saying tax and levy. Messing of the terminology to confuse the issue. my bad.

  • dust on 17/07/2022 - 18:36

    Extend medicare to everything

    Even for elective type of surgeries?

    • random12 on 17/07/2022 - 18:38
      +18

      I think you mean 'cosmetic' and not 'elective'.

      Because even some 'elective' surgery is recognised as very important (people are in pain without it).

      Everything required to keep people alive and not suffering in pain, should be covered with public money. DONE

      • dust on 17/07/2022 - 18:53
        -5

        I understand the sentiment but elective surgeries are not all so clear cut like that.

  • brendanm on 17/07/2022 - 18:37

    This is why you get a spouse, then the amount goes to $180k.

    • random12 on 17/07/2022 - 18:39

      It also counts both incomes lol, but yes I agree that its likely that not both work full time.

    • dust on 17/07/2022 - 18:52
      +1

      Only works if you get a spouse that doesn't work/doesn't work much. But financially you're better off getting a spouse who makes lots of money and either paying for PHI or the levy surcharge.

      • brendanm on 17/07/2022 - 19:17
        +2

        It was a joke, getting a spouse to save on Medicare levy surcharge is not an actual suggestion.

        • mbck on 17/07/2022 - 19:18
          +13

          Too late, I'm getting 3

          • brendanm on 17/07/2022 - 19:22
            +4

            @mbck: Good idea actually, stacking spouses like you stack Amazon coupons. Get to half a mil before paying Medicare levy surcharge.

          • CantonasKungFuKick on 29/07/2022 - 23:43

            @mbck: Add kids to the mix too, pushes up that threshold a little bit more

        • Ryk on 18/07/2022 - 13:19

          need ozbargain page for spouse bargains

          • fadeinthemix on 03/08/2022 - 16:33

            @Ryk: I would rather pay the medicare levy surcharge

  • Drakesy on 17/07/2022 - 18:46
    +22

    The policies are there because the liberal government wanted to look after their whinging private healthcare lobbyists.

    :)

    • random12 on 17/07/2022 - 18:47
      +5

      I am going to send some messages to local labor member and PM Albo.

      Their first task is to get rid of that scam.

    • Aureus on 03/08/2022 - 19:07
      +1

      Yeah. John Howard the brilliant economic manager funneling billions of tax payer dollars to private companies. Definitely not one of the worst PMs we have had.

  • watwatwat on 17/07/2022 - 18:52
    -1

    because people just buy a rubbish policy that covers nothing, and still go public.

    Just do this and move on with your life. It's not your problem any more and you don't need to feel bad about getting a raise.

  • GrueHunter on 17/07/2022 - 18:52
    +4

    The standard medicare levy is 2% of income and is for everyone.

    What do you reckon it'd need to be to cover "everything" for "everyone"?

    Seeing as though you've clearly thought through the maths and have better modelling than Treasury does and you're not just making a knee-jerk whine post because you maybe just realised you have to pay the levy and you're looking for sympathy

    • random12 on 17/07/2022 - 18:57

      Ok. Figure out exactly what it costs to cover everything, and then raise the rates accordingly.

      I will tell you right now. It is far cheaper having it all funded through tax, than having this public/private mix which is rubbish. Does everyone really have the time to compare all the policies and 'shop around' for a great deal. No, just have it all negotiated centrally by the government actuary. Have the purchasing power of the government to stand up to the medical companies.

  • Crow K on 17/07/2022 - 18:55
    +15

    PSA: This is the guy that had similar shower thoughts on what annual leave liability was and how to 'fix' all of that as well and then spent 3 pages of comments basically demonstrating how little they understood the concept and refused to listen to those who did: https://www.ozbargain.com.au/node/670193

    I'd take any "alright yeah this stuff is so simple no one needs it make it cover everything problem solved" thought bubbles with a very large grain of salt.

    (I know the default is remind everyone it's the KFC chip box not being filled dude but "inventing solutions for things that are more complex than you think" seems a better fit for this discussion)

    • happydude on 17/07/2022 - 19:00
      +2

      ah, the memories….

    • jacross on 18/07/2022 - 10:35
      +1

      "inventing solutions for things that are more complex than you think"

      To be fair if we acknowledged this then it would shut down 99% of discussion on here, reddit, facebook…

      Actually I think that WOULD be a good thing.

    • SlickMick on 18/07/2022 - 13:14
      +1

      Ah thanks, I got caught up in that one too. I'm out.
      I think I'll stop reading the forums.

  • morse on 17/07/2022 - 19:00

    I do share your sentiments, but unfortunately the public system can’t keep up and if ever it swings it will need to be a slow transition back to all public. As it stands the public system is commissioning private to take on public patients (at great cost to tax payers).

    • random12 on 17/07/2022 - 19:04
      +4

      Exactly. Thats why all these private insurance scams should be shut down, and the medicare rates should be increased to properly fund the health system. Full public - UK NHS style. Get rid of the executives and their bonuses.

      • brendanm on 17/07/2022 - 19:19
        +3

        Yes, the NHS wait lists are fantastic 😂

        • random12 on 17/07/2022 - 19:22
          +1

          I would prefer a wait list over another health insurance executive with an obscene bonus.

          • brendanm on 17/07/2022 - 19:23
            +1

            @random12: We already have wait lists, so happy days for you. I like the fact that I can pay out of pocket and get my surgery done in a couple of weeks, and don't have to wait over a year in the public system, while also not paying the scumbag health insurance companies.

            • random12 on 17/07/2022 - 19:25
              +2

              @brendanm: And the reason why people in the public system are waiting so long is because we have this parasitic private health insurance system that is consuming resources. All money spent in the public system gets a better return, because we dont have the profit margin and bonuses of the CEOs.

              • brendanm on 17/07/2022 - 19:25
                +1

                @random12: Then why does the NHS have such long wait lists?

                I dislike private health by the way, as well as how it is forced upon people, however, the funding is not there for medicare.

                • orangetrain on 18/07/2022 - 08:17
                  -1

                  @brendanm: There's long wait lists because private hospitals are allowed. If there was only public hospitals, suddenly the wait lists would be very small with massive resources poured into it.

                  Private health hospitals are a symptom of government policy failure in a 1st world country.

                  • brendanm on 18/07/2022 - 10:14

                    @orangetrain: Not sure how that makes sense. Private is there, because public can't cope.

                    • orangetrain on 18/07/2022 - 10:42

                      @brendanm: Public can't cope because neo-lib governments and billionaire-owned media have discouraged and advocated for cuts to public hospitals/staff.

                      The funny thing is, all these long wait lists "by design" cost more to society in long run. For example, those waiting to get a X Ray of the knee wait and it turns out it could be treated more cheaply if they caught it earlier.

                      Tax the rich. Fund hospitals more. Automatic inquiries if wait lists take more than a month.

                      • brendanm on 18/07/2022 - 13:04
                        +1

                        @orangetrain: I don't think I would know a single person who would think cuts to public is a good idea, more the opposite in fact.

                        Automatic inquiries if wait lists take more than a month.

                        Sounds like a tremendous waste of money.

      • Webber000 on 17/07/2022 - 19:49

        UK pays 25% tax though for this (employer and employee contributions to "National Insurance" which was originally designed to cover the NHS plus other free medical stuff and the state pension/super that everyone gets - so granted its not all NHS and its no longer as clearly cut now). Thats in addition to PAYE/income tax (though granted UK citizens pay less tax compared to Australia even with this).
        My point is the 2% paid in Australia can't possibly be anywhere near enough to cover it and you would be talking about increasing it to 15%+ which I don't think Australians would pay.
        I totally agree with you though. But I'm afraid it will go the other way and government will encourage/force/tax us more towards Private in order to try to force more people onto the private side as they won't want to pay for people to use public much longer.

        • donkcat on 17/07/2022 - 21:28
          +2

          The medicare levy is really just about optics anyway, like you pointed out it falls a long way short of actually covering the medicare costs. In fact in 2017 the medicare levy would have needed to be 10.4% to cover the cost. Now obviously everyone would jump up and down if the government come out and wanted the levy to be self sufficient at covering medicare and increased the rate to 10.4% but we are already paying that figure, it's just not an allocated 10.4% you can see come tax time. If the government increased the rate to 10.4% then they would either lower tax rates accordingly or have a massive increase in tax revenue by not passing on the increase.
          From what the OP is getting at, the question is how much would our taxes have to increase to cover the private health work load, I don't have that answer.

  • Tomcruise on 17/07/2022 - 19:01
    +7

    Immigration to prop up the Housing market has caused us so many issues. Australia was a GREAT place to live, i don't think that's the case anymore.

    • netjock on 17/07/2022 - 20:22
      +3

      They are thinking of lifting the skilled migration program to 260k next year to catch up for the pandemic. You know what is going to happen then. 7% inflation and 2% pay increases if you are lucky.

      • DemocracyManifest on 18/07/2022 - 07:18
        +2

        Ah yes, the skilled dominoes pizza makers and call centre workers 🤣

        • Quantumcat on 18/07/2022 - 09:23
          +1

          And aged care workers and nurses…

  • Mokr on 17/07/2022 - 19:04
    +3

    Hecs repayment is a scam

    Lots of people get free education and don't repay any of their debt

    • DemocracyManifest on 18/07/2022 - 07:20
      +1

      That’s impossible for ‘lots’ to not have to repay considering the threshold this FY is $48,361. If one is working full time minimum wage they will be making a repayment, if not though their PAYG tax, but in their return

    • mrtin on 18/07/2022 - 07:35
      +4

      We should be greatful we get access to this scheme. We are lucky to be given the choice to get Higher Education.

      • DemocracyManifest on 18/07/2022 - 22:11

        I understand the sentiment but after completing mine, I dunno how it’s worth $30k 😂. I got it done before it got jacked

  • z0s0 on 17/07/2022 - 19:12

    100% agree.

  • netjock on 17/07/2022 - 20:37

    It is a bit of a scam off the public system. I haven't been to the hospital for like 20 years. A few hundred on optical, few hundred on dental plus emergency ambulance over is pretty good value although you won't get every dollar in value because funds need to make a profit but better thank pay the surcharge and have no optical, dental or ambulance.

  • CheapskateQueen on 17/07/2022 - 20:51
    +2

    I just wish between Medicare levy and PHI all my essential medical expenses were covered. It's baffling that dental, specialists, MRIs, various treatments (eg cortisone injections) are all out of pocket.

    I'd rather a higher PHI that actually covers the things I need.

    • Trying2SaveABuck on 17/07/2022 - 22:01
      +2

      throw in Allied health ie Physio Rehabilitation etc

  • Trying2SaveABuck on 17/07/2022 - 21:20

    i agree why is public money being used to prop up a private sector

  • bobbified on 17/07/2022 - 21:26

    Medicare Levy Surcharge Is a Scam

    Have you only just realised?

  • loropy9 on 17/07/2022 - 23:10
    +3

    If every single fish in the tank boycott the private health sharks, they would leave running back to Murika tail between their legs. Sacking 50% of the fat cat health bureaucrats could be of public benefit too. Anyway 2% is way to low to sustain a decent public health system. Medicare should get higher % of our income. I pay 5.5% of my income just for the stupid strata scheme with its ripoff tradies. People spend 2% of their incomes for new electronic devices they don't even need and then go to complain they had to pay $300 for a specialist.

  • El-Rhi on 18/07/2022 - 06:39
    +3

    The issue with the MLS is with the thresholds. The $90k for singles and $180k for couples have not been indexed since 2014. Back then, these were relatively high incomes, but not really anymore. If they were indexed for WPI the thresholds would be around $105k and $210k. Another example of bracket creep that neither side of government wants to address.

    • DemocracyManifest on 18/07/2022 - 07:22

      They definitely won’t now haha

    • nobro25 on 20/07/2022 - 13:34

      Yea 90k is like crap nowdays with inflation and all. I earn almost 90k and I have to pay mortgage, bills etc… Love by myself and eat out once a month max. After tax I basically have 60k to spend.

  • dec1an on 18/07/2022 - 09:27

    Strong agree with OP. It's just rent-seeking BS from insurance companies

  • afah0447 on 18/07/2022 - 14:04
    +3

    I hope you have never voted for the LNP because every policy decision you just outlined is one of their genius ideas. The blame goes all the back to Howard and kept getting worse.

  • Vote for Pedro on 19/07/2022 - 13:56
    +1

    Feels like we’re twins. It’s exactly that, a shakedown to line the pockets of the private health industry. If the money went to the public system in taxes, we’d be much better off than for profit medical care.

  • Stuntdriver on 28/07/2022 - 17:05

    Just came to the same realisation when my wife has gone back to work after having kids now have to look into health cover to avoid the extra tax, spoke to someone from compare the market and asked him what you get with basic cover which was pretty much line ball with what i would pay in tax and he said you get basically nothing, you might save $100 in tax but you will still need to use the public system, so your basically paying a private company money for nothing to avoid paying $100 in tax. The Ozbargainer in my says i should do whatever i can to save that $100 but logically it doesnt make sense i would rather pay the government as they will be the ones providing a service in the end not the private health insurance.

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