It's been 10 years since the federal government began its series of financial motivators to encourage Australians to purchase and maintain private health insurance, despite the hefty price tag that goes with it. By setting in place a 33 percent premium making private coverage more expensive to purchase after age 30, and by establishing a tax - a Medicare levy surcharge - for high income earners who do not have a private health plan. These rules gave high income earners and those individuals 30 and under an added incentive to purchase and maintain private health care.
When you're comparing private insurance policies, how do you know if you're getting value from the health care plan you choose?
Becoming informed about health care options in Australia is your first step toward making sure you are getting the best value for your health insurance. No matter how you look at it, purchasing private health coverage is not cheap. Data from the Private Health Insurance Ombudsman (privatehealth.gov.au) shows that coverage for a family can cost between $141 and $245 monthly, and can run as high as $413 depending on the policy and the level of services you choose. Extras, such as optical, dental, chiropractic and alternative therapies such as acupuncture will raise the price of your premium.
Purchasing less expensive policies may be more budget friendly for many Australians. However, it's important to weigh the benefits of selecting a cheaper policy if the coverage limitations are going to hurt you down the road, if you or a family member is injured or becomes sick. In order for your health insurance to be both comprehensive and affordable, it is critical that you are well informed when it comes time to compare plans. The more you know about the options available to you and your family, the better the value you will receive on insurance coverage that suits your needs.
Avoiding the surcharge makes purchasing private medical coverage a sound financial choice. Consider this: If you're a single individual who earns more than $77,000 yearly, you will be saddled with a one percent tax increase if you do not have private insurance, a valid financial reason for high income earners to maintain private hospital insurance. If you have a spouse and children, and your combined taxable income is $154,000 or more, your surcharge increases by $1500 for the second dependent child and every child that follows. Keep in mind when comparing insurance plans that there are medical policies available that actually cost less than paying the one percent surcharge. Although these policies will most likely not cover as much as other more expensive plans, they will provide you with the coverage you need to avoid the Medicare tax. Make sure that the policy you choose is Medicare levy surcharge exempt, as not all private insurance plans are.
We all know that avoiding a surcharge is not the best reason to buy private health care coverage. Having options regarding your treatment if you or a family member are injured or become sick makes having comprehensive private health insurance an excellent value in the long run. Private coverage ensures avoiding public hospital waiting lists if you prefer private hospital care. Keep in mind, you can still access public hospitals if you prefer. With private medical coverage, you have s choice.
Your health insurance also frees you and your loved ones from the burden of worrying about the high cost of treatment when illness or injury strikes.
Purchasing the least expensive private health insurance plan, however, will not provide you with the peace of mind that comprehensive coverage offers. When comparing insurance policies, look into the best coverage you can afford that is recommended for your life stage, and make sure you are paying for coverage with your needs and your family's needs in mind.
To get the most value out of your private health plan, know the benefits you're paying for. The value of those benefits will determine the value of maintaining your private health coverage.
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