With private health insurers increasing premiums and changing your coverage earlier this year, it is no secret that consumers have been shopping around for a better deal.
We are aware that inflation is a part of the economy. However, that doesn’t mean you should always grin and bear it when it comes to services upping their prices. Shop around, get quotes, discover if you are entitled to loyalty rewards, discuss options etc. etc.
Private health has seen some massive changes so far in 2019. Not only this but there is evidence that millennials see private health as the bottom of the priority list for how they spend their money (at least ten spots below smashed avo on toast). So – just like getting the best deals from your banks, now’s a better time than ever to shop around for the best deal with your private health provider.
At the beginning of the year, the Department of Health introduced private health reforms: Gold/Silver/Bronze/Basic product tiers.
The new product tiers give consumers greater certainty about the services covered by each type of hospital treatment product.
It is now easier to shop around and compare different hospital treatment products to find one that meets individual needs.
Tips from Power2?
Talk to your financial planner for options. At Power2 we have a solution and can provide an obligation-free quote to compare.
Power2 Brisbane Pty Ltd is an Authorised Referrer of myOwn health insurance. MyOwn health insurance is backed by GMHBA (an Australian not-for-profit health insurer with more than 80 years’ experience) and AIA’s Vitality health and wellbeing rewards program. MyOwn provides a range of options from basic private hospital to top level hospital and extras.
From a tax perspective
Every year taxpayers contribute 2% of their taxable income to the Medicare levy which helps fund some of the costs of Australia’s public health system, Medicare. The Medicare levy is collected from you in the same way as income tax. If you do not have an appropriate level of private patient hospital cover and your taxable income exceeds $90,000 for singles of $180,000 for families than you may also have to pay the Medicare levy surcharge (MLS).
MLS is an additional tax between 1% and 1.5% of your taxable income, and is calculated by the ATO upon lodgement of your tax return.
Depending on your circumstances, the Medicare levy, the MLS or variations to your private health insurance rebate may impact the refund you receive or the tax you owe.
So, what is the appropriate level of private patient hospital cover?
At Power2 we have summarized this to make it easy for our customers to understand:
- Private patient hospital cover is provided by registered health insurers for hospital treatment provided in an Australian hospital or day hospital. You must arrange and pay for your cover directly with the insurer.
- For singles, an appropriate level of cover must have an excess of $500 or less. Couples or families must have an excess of $1,000 or less.
- If your private health insurance policy does not provide an appropriate level of private patient hospital cover, and your income for MLS purposes is above a certain threshold, you may have to pay the MLS.
- General cover, commonly known as ‘extras’, is not private patient hospital cover. It covers items such as optical, dental, physiotherapy or chiropractic treatment.
- Travel insurance is not private patient hospital cover for the purposes of the MLS. Similarly, private patient hospital cover does not include cover provided by an overseas fund.
If you want to review your private health insurance and see what options are available to best suit your individual needs, click here for a no-obligation free quote and to find out more.