Didn’t pay for your health insurance annually? Don’t worry

health insurance annually

Didn't pay your health insurance annually? Don't worry.

Now we’re into April you’ll start to notice a few things beginning to change: the temperature gets a little cooler, your health insurance starts costing a little bit more, and the amount of health insurance ads that have dominated your TV screens for past month have disappeared. You’d be forgiven for thinking that March is the only time people switch their health insurance, but I’m here to tell you this is definitely not the case.

The Myth

Switch on your TV in March, log into Facebook or read one of those suggested articles at the bottom of a news article and you’ll be inundated with advertisements telling you to beat the rate rise by paying health insurance annually in March.

There is so much health insurance related marketing that you'd think that people only switch in March, when they can afford to pay health insurance annually.

The Facts

The truth is only a small amount of people choose to pay their health insurance annually. Looking at our own customer base historically, only 3% decided to pay for their health insurance annually. Even in March this number only spikes to 15% based on the previous two years.

The main reason for this, is that health insurance can be expensive! It’s really not uncommon for a family on top cover to be paying well over $6,000 a year on their health insurance annually. Most people just don’t have that sort of money just sitting in their bank accounts to pay it off in one fell swoop.

What does it all mean?

March has been and gone – your health insurance premium has unfortunately increased and it leaves you with two options:

  1. The first option is to remain on your current plan and keep paying a higher premium for the same benefits you had last year, which your current health fund is banking on.
  2. The second, and more advisable option is to compare your private health insurance and see what else is out there. Just because you compare your cover, doesn’t mean you necessarily have to switch. The Private Health Insurance Ombudsman suggests to review your cover at least once a year as your circumstances can change.
health insurance annually

Who should you review with?

Health Deal is an excellent choice, as we quality check 100% of sales calls unlike some other comparators, which provides you confidence that you were given the correct advice if you decided to switch.  If you’ve never compared your health insurance before, here are some of the benefits:

  1. Lower your monthly premium as well as find higher benefits/rebates
  2. No waiting periods on hospital when you switch, as long you have served them already
  3. Transfer paperwork is handled on your behalf
  4. Choose from multiple health funds
  5. Be more informed about your current policy (as well as about health insurance in general)
  6. Tailor a policy to your individual needs by removing the excess waste you don’t use

Compare Health Cover Now

Health Deal’s goal is to give you a superior policy for around the same price, or an equivalent policy at a lower cost.

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Lifetime Health Cover Loading & Medicare Levy Surcharge – what this really means to you

It’s almost June 30 – what do I do?

It’s the End of Financial year and each year you may hear about “Lifetime Health Cover Loading” or “LHC” but what does this really mean to you?

The Lifetime Health Cover Loading initiative penalises any Australian Citizens or Permanent Residents who do not take out Private Hospital cover from July 1st following their 31st birthday as well as people migrating to Australia who are over 30 and don’t take out cover within 12 months of arriving in Australia.

How does the penalty affect you?

Lifetime Health Cover Loading penalises you by adding 2% loading to your hospital cover for each year you fail to join after your cut-off date. For Example: If you take out hospital cover at age 40 you will pay 20% more than if you took it out at age 30.

“I’m over 31 with no health cover, does this mean I can’t afford it?”

Absolutely not, in fact here at Health Deal we pride ourselves on our ability to find an affordable and suitable option for you and your family. The maximum penalty loading is 70% which would apply to those aged 65 years or more – so, the sooner the better!

Keep in mind, once you’re in… You’re in! Your penalty loading is locked at the percentage at the time of joining and once you’ve held cover for 10 consecutive years the loading will be dropped completely. There is light at the end of the tunnel.

But wait, we can’t let LHC get all the attention… let’s discuss the Medicare Levy Surcharge.

The Medicare Levy Surcharge applies to singles who have a taxable income of over $90,000 and couples or families who have a combined income of more than $180,000 and do not have Private Hospital Cover.

If you earn over these thresholds, you will pay a levy at tax time for not having Private Hospital Cover, how much will you pay? That’s worked out as a percentage of your taxable income. Check out the table below which current thresholds:

MLS income thresholds for 2014–15, 2015–16, 2016–17 and 2017–18

What’s the good news you ask? By taking out any level of Private Hospital Cover you can avoid paying the levy all together and better yet: Health Deal is a free service to you so give us a call today on 1300 369 399 and we will work with you to ensure you and your family are in the best possible position at tax time. If you’re already sorted with your health insurance, call us anyway. The new financial year is a great reminder to review you and your family’s cover – we recommend doing so every twelve months.

 

 

Should I cancel my health insurance? Read this first.

An interesting article appeared in Fairfax newspapers that suggested that people do not need private health insurance.whyyoudontneedphu
If you are considering cancelling your health insurance policy on the back of this bold advice, it is worth considering a few very important points.
Australia is incredibly lucky to have a strong public health system that protects those in need. Does that mean that there is no place for the private system? Of course not. Both systems play a very important role in spreading the demand for medical services across two systems and ensuring that those who need free healthcare the most are able to access it. Conversely, those who are wealthy enough to afford to pay for healthcare, can and should do so.

The fundamental reason that the private health system exists is to take the burden off the already overcrowded public system. If you are wealthy enough to pay for private health, is it really fair to clog up waiting lists and beds when there are people much more needy who cannot afford private health? Having an effective blend of public and private healthcare is a sensible way to balance the needs of the lower income earners and efficiency of services.


The argument that you should refrain from paying insurance and keep the savings under a bed for the day when you need to pay for an expensive service is all well and good unless you believe in managing risk.  And it is important to understand the fine print for all insurance policies, whether it is for your health, your car, your travel, your pet or your life. To imply that health insurance products are inferior to other insurance products is simplistic at best and misleading at worst. The best way to find out if you are covered for a particular service, or if the hospital you want to go has an agreement with your health fund, or if there will be a medical gap payment when in hospital, is to speak to an expert from your fund or a comparator.
The article implores us not pity health funds because their actuarial team ensures they make a profit. To look at this from another angle, would you really expect – or even want for that matter – your insurer to be making large losses? If they were haemorrhaging cash and about to fold, would you feel confident in them being able to cover you when they need to?  The vast majority of health funds are not for profit anyway, which means that profits are returned to members.

phirebate

Now, let’s discuss the concept of the policies out there to avoid tax. The article suggests that a morally responsible person should donate extra taxes to the Government in the form of the Medicare Levy Surcharge (MLS), rather than try to get something like a policy for their money.  The other point to note is that the Medicare Levy Surcharge contributes to Federal Government Consolidated Revenue; “roads, schools and hospitals” are actually controlled by State Governments, not the Federal Government.  In any case, if you had the choice to pay the MLS or receive a health insurance policy for the same or even less money, what would you do? Someone who earns $150,000 a year will be liable for $2,250 in extra tax payments to the government if they fail to take out a private hospital policy. You could instead choose to purchase a health insurance policy and get something in return.

 

Think of this example for instance: HCF’s Mid Plus Hospital Policy with a $500 Excess would cost you only $1,692.60 (for a Victorian Single), so you could purchase that policy, have coverage for thousands of medical procedures in a private hospital and still have cash left over.
You could even bundle an extras policy alongside your hospital policy and receive coverage for all sorts of ancillaries. Take Silver Plus Extras for instance – this will set you back (as a Victorian Single) another $450, and you will receive two free check-ups and cleans at HCF preferred provider dentists and receive no gap eyeware at HCF’s network of optical providers, in addition to a whole range of other ancillaries benefits under the policy. You also wouldn’t have to worry about the Federal Government going and spending your money on the latest poorly thought out spending spree that’s aimed at winning your vote. The best car insurance policy you ever have is one you never have to claim on. Private health insurance is the same for at least the hospital component – we would all love never needing to go to hospital. Extras at least allows you to benefit without necessarily being sick. If you focus only how much you get back from your braces, you will never be satisfied with an extras policy. But if you need dental, optical, physio, chiro and remedial massage (just to name a few!) you will probably start to see some reasonable return for your money.

 

The last point we should examine is that of waiting lists. If you choose to cancel your private health insurance policy, you should keep in mind that you cannot waltz into a public hospital when you require elective surgery and demand to be treated immediately on your terms. This is because hospitals are already overcrowded and there is a pecking order of need that dictates who is treated first. If you have a coronary emergency, you will naturally be treated before someone who has a broken wrist. But if you need an arthroscopy on your knee to repair a torn ligament, do you really want to wait around for potentially months or a year, while your quality of life suffers in the meantime? Private hospitals are there for people that can afford it, so they do not have to worry about these sorts of waiting lists. And if you can afford it, is it morally responsible to deny someone a bed in a public hospital if they are needier than you?

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All of these issues are thought provoking, and the important thing is to ensure that you engage appropriate levels of research, speak to a financial adviser about your financial implications, and speak to a health insurance expert to compare the policies available, before rushing to cancel your policy on the back of advice that you don’t need your policy when in all likelihood, you probably do. If you would like discuss what policies might save you money, please call us on 1300 369 399.