An easy guide to buying private health insurance.

Transcription

1 An easy guide to buying private health insurance.

2 Getting private health insurance for tax a very simple check list 1 To save on tax you need appropriate hospital cover Most hospital covers will qualify for tax savings, but check before you buy. Extras and Ambulance-only cover won t help you save on tax. 2 Choose the cover that meets your budget, health needs and life stage Planning on starting a family? Get cover for obstetrics Young, fit and healthy? A basic cover could be for you Read our guide for more help on selecting the right cover 3 Avoid any surprises An excess can help reduce your premium but also mean paying more if you go to hospital 4 Do you want extras? If you ever visit the physio, get regular dental treatments or wear prescription glasses then you d probably benefit from extras 5 Compare quotes to get the best cover for you Bear in mind that comparative websites don t include all private health funds The government has a free health comparison tool located here: Chat to an expert for more information or call

3 What is private health insurance? Is this the same as Medicare? While the Australian government covers some medical expenses through the Medicare system, private health insurance offers greater choice to members. That s why almost half of all Australians have private health cover. These are some of the most important differences between Medicare and private health insurance when it comes to hospital treatment. I get more control and choice! Hospital cover gives you greater choice about which doctor or surgeon treats you, the hospital you visit and how soon you re treated. Medicare Hospital treatment in a public hospital only Treatment by a doctor appointed by the hospital You might not get a choice about when you re treated, particularly for elective surgery Private Health Insurance Benefits paid for treatment in a private or public hospital Treatment by a doctor of your choice More control over when treatment occurs

4 Other services Medicare doesn t cover Remedial massage sounds good! General dental Major dental Orthodontics* Optical Items Speech therapy Extras cover helps pay for everyday services not covered by Medicare. Depending on your cover, these are some of the services you get benefits for under extras. Chiropractic Dietetics Occupational therapy Ambulance services Physiotherapy Podiatry Naturopathy, acupuncture & remedial massage

5 What s the big deal about private health insurance and turning 31? Around your 31st birthday, you pay an extra 2% on premiums for each year you go without hospital insurance. You must take out hospital cover by 1 July following your 31st birthday to avoid paying the Lifetime Health Cover loading. Extras or ambulance-only cover is not enough. Every year you wait after you turn 31 adds 2% extra to your premium when you finally do take out hospital cover. The loading is dropped once you have held hospital cover continuously for 10 years. I need to act quickly! 31 Today Extra amount you ll have to pay - Lifetime Health Cover Loading 2% 20% 40% 60% 70% years years years years years Lifetime Health Cover Loading Years without hospital cover For more information about the Lifetime Health Cover Loading visit

6 I m not sick and old so why would I want private health insurance? In addition to the Lifetime Health Cover loading (see previous) there are two other Government incentives to join private health funds: The government can help pay for my premiums The Federal Government Rebate Income levels for people under 65 years 30% 20% 10% 0% Rebate Rebate Rebate Rebate $88,000 or less $88,001 - $102,000 $102,001 - $136,000 $136,001 or more $176,000 or less $176,001 - $204,000 $204,001 - $272,000 $272,001 or more singles families The government can help pay towards the cost of your premiums, depending on your income # # Please note the threshold information is a general guide only and may vary according to your particular circumstances. For more information, visit ato.gov.au or speak to your financial adviser. For more information visit:

7 Medicare Levy Surcharge Will I have to pay more tax if I don t get hospital cover? Percentage of your income you ll be taxed Medicare Levy Surcharge Income levels for people under 65 years 0.0% 1.0% 1.25% 1.5% $88,000 or less $88,001 - $102,000 $102,001 - $136,000 $136,001 or more $176,000 or less $176,001 - $204,000 $204,001 - $272,000 $272,001 or more singles families Depending on your income #, if you don t have appropriate hospital cover, you might have to pay the Medicare Levy Surcharge i.e. more tax For more information visit # Please note the threshold information is a general guide only and may vary according to your particular circumstances. For more information, visit ato.gov.au or speak to your financial adviser.

8 How do I know what health cover to get? hospital policies* extras policies* combined policies* So much choice! Where do I start? At Medibank, it s our job to help you find the right cover. *Approximate number of policies available according to the Private Health Insurance Administration Council What are my needs? Reduce tax Start a family Think about your health needs to find the cover that s right for you. Great dental cover Great optical cover

9 What s my age, family circumstance and budget? Basic Mid Top If you re young with low risk factors you may want to consider a basic hospital product If you re thinking of having a baby or want cover for more than just the basics, medium hospital insurance could work for you Top cover with no excess reduces budget surprises, especially if you re more likely to claim I get more than just health insurance Lower outof- pocket expenses Health support services Convenient ways to claim Access to other insurance

10 Should I buy health insurance directly from the fund or from a comparison website? Government comparison tool You can compare health insurance for free using the government s health insurance comparison tool: The database features all health insurance policies available and allows you to search various levels of cover. Other comparison sites Fund aggregators are a simple way to compare, but not all health funds and their products are represented. Health insurance funds Of course, you can purchase cover directly from health funds themselves. Most offer the ability to join by phone or internet, and will help you choose one of their cover options that best suits your needs. Larger funds may also have retail stores where you can enquire about policies, join up, and also manage your memberships and make a claim. Funds may also have special offers which are only available if you join directly with them.

11 Jargon Buster ANNUAL LIMITS Some treatments have a limit on the amount you can claim back from your health fund per year. For example, Medibank Top Extras 70% gives you can claim up to $600 on physiotherapy in a calendar year. AUSTRALIAN GOVERNMENT REBATE Depending on your age and income, the government could cover up to 40% of your health insurance premium. For more information visit the Private Health website: incentivessurcharges/insurancerebate.htm CO-PAYMENT Some hospital policies have a co-payment this is a set amount per day that you pay towards the cost of your care when you re in hospital. For example, you might have to pay the first $100 per day. Co-payments usually have a limit on the number of days they are charged. EXCESS Like other types of insurance (car, home, etc), you can agree to pay an amount towards the cost of hospital treatments. If you choose an excess, your premium will be lower. For example, the excess on Medibank s hospital policies are between $0-$500 depending on what you select. EXTRAS COVER Helps pay for services not covered by Medicare such as prescriptive glasses, trips to the dentist or physiotherapy sessions. Hospital cover contributes to the costs of treatments in a private hospital, as well as ambulance transport. LIFETIME HEALTH COVER An Australian Government scheme to encourage people to purchase hospital insurance earlier, and to stay covered through their lives. People who take out hospital cover after 1 July following their 31st birthday generally pay more for their premiums when they do eventually take out hospital cover. For more information visit: MEDICARE LEVY SURCHARGE This is an additional tax paid by Australian residents who earn over a certain amount and don t have an appropriate level of hospital cover. For more information visit: WAITING PERIODS Health insurers typically have waiting periods that everyone serves before they can receive benefits. If you haven t had health insurance before or it s been over two months since you had health cover, you ll need to serve waiting periods.