Tax Savings

By taking out eligible levels of Private Health Insurance you can save tax. if you are single and earning up to $100,000 or a family earning up to $150,000 combined income without Private Health Insurance you will pay an extra 1% Medicare Levy which equates to a lot more per year. Money that is wasted and that could be used to purchase cover. On top of the tax savings, the Federal Government rebates 30% of your insurance costs. So not having Health Insurance often turns out to be false economy for some people.

If you wish to take out private hospital insurance to avoid paying the Medicare Levy Surcharge you need to be aware that some policies with high excess (over $500 for singles and $1,000 for families/couples) are exempt, which means that you will still pay the additional levy despite the fact that you’ve paid for health insurance. It’s important to check with the health fund before you take out a policy.

Over the last few years government legislation has applied incentives (punitive and motivational) that make Private Health Insurance more affordable and desirable. These incentives include:

Lifetime Health Cover — This penalises people who take out health insurance later in life by charging higher premiums. If joining after your 31st birthday, you pay a 2% surcharge per year up to a maximum surcharge of 70%. Joining at age 45 means you will pay 30% more than someone that joins at age 30.

Medicare Levy Surcharge — Singles earning above $50,000 and couples/families earning above $100,000 (plus $1,500 for each child after the first) pay an extra 1% Medicare surcharge (in addition to the 1.5% Medicare Levy). This can be avoided by taking out qualifying hospital insurance.