Private Health Insurance

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Private Health Insurance runs at an average premium of $180p/m, but the question is; Is it worth it?

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It is a common myth that having private health insurance will mean you get to avoid the Medicare Levy, which is a flat 2% added to your Marginal Tax Rate, and is applicable for most Australians. Having private health insurance will only remove your liability to pay the Medicare Levy Surcharge which starts at 1% for people earning over $90,000.

Secondly, having private health insurance doesn’t mean free health care, infact when you go into hospital as a private patient Medicare still pays 75% of the cost (inline with the Medicare Benefits Schedule) and your private health insurance company pays the remaining 25%. However if you doctor charges more than the MBS, you will most likely be out of pocket for the difference.

The government does support Australian’s taking out private health insurance cover, and that is done in two ways. 

First we have the private health insurance rebate, which the government covers part of the cost of cover depending on how much you earn. Then we have discounts on private health insurance for people who take out cover before turning age 20.

One thing you need to look out for is the Lifetime Health Cover loading, which is a premium of 2% applied for each year over age 30 you wait to take out private health insurance (maximum loading of 70%) and that loading applies to your first 10 years of insurance.

You need to way up if the cost is going to beneficial long term, and that if private facilities are going to be something you use and are happy to cover potential gaps, or if you would prefer to rely on the public health system.

If you would like to know more please visit PrivateHealth.gov.au or for information about the Medicare Benefits Schedule visit MBSOnline.gov.au

Of if you would like to meet me to discuss your personal and financial goals, click the booking button below.

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