Do You Need Private Health Insurance Cover?

Do You Need Private Health Insurance Cover?

The rising cost of private health insurance is causing many people to drop their cover and place their reliance on the public system.

Appropriately on April 1 each year the premiums are adjusted, and whilst this year’s increase was only 3.25% many can no longer afford it.

Hospital and Extras

We have the choice of taking up hospital and/or extras cover. Hospital cover is used when you need to be treated as a private patient in a public or private hospital. Costs can be huge so this cover can certainly help. Most cover has an excess, which can’t exceed $750 for singles or $1,500 for a family per visit.

Extras cover can help reduce the cost of expenditure on dental, optical and physio for example.

Picking Your Cover

It’s a tough task to work out what is right for you and whether you are getting value for money? Every individual and family are different, so we recommend visiting the government website www.privatehealth.gov.au which compares every health insurance policy available.

Lifetime Health Cover Loading

This is designed to get young people to take out cover before they turn 31. From that age, you will pay a 2% loading on top of the premium for every year you don’t have hospital cover. This can reach up to 70%!

Medicare Levy Surcharge

This is the levy paid by taxpayers who do not have private health cover and earn above $90,000 for singles and $180,000 for families. Basically it is a way of penalising people through the tax system for not taking out private health insurance. As a result, this drives more people to use the private system and reduces the demand for services on the public health system. This can cost an individual over $2,000 per year in extra tax.

Courtesy Sophie Elsworth New Ltd

If you have any further questions or require any other accounting advice, please contact us here.