stuie83

Hi,

I'm trying to get my head around the Medicare system. I arrived on a 457 visa in October 2010 and signed up for a Medicare card. This entitles me to reciprocal cover, so that's essential/emergency treatment only.

As I've got the reciprocal cover Medicare card I'm guessing I have to pay the Medicare Levy (1.5% of gross taxable income) plus the Medicare Levy surcharge (an extra 1%) as a single person with no dependants earning over the 73k threshold.

I spoke to medibank who initially said I'd have to go on a visitors policy, but when I said I wanted to minimise my medicare levy payments they said I could go on the 'Young Hospital' policy, and then pick an extras package to suit my needs. The Young Hospital policy is pretty basic, but they can't offer me anything else for inpatient care as medicare wouldn't have covered me anyway.

So my question is, if I take out medibank cover (costs around 1% of my salary) will I be exempt only from paying the 1% surcharge?

If I had a time machine and could go back to Oct 2010 would I have been better off taking out an insurance policy for visitors and not signing up for medicare to avoid paying the levy and surcharge for a service I have only limited access to?

Thanks for your help.

jeppy

no i do believe you have to splash out for maximium cover and i think you may be talking 1.5 l% levi not sure if it has gone up yet

fish.01

"Reciprocal health care agreements cover treatment that is medically necessary. Medically necessary treatment means any ill-health or injury which occurs while you are in Australia and requires treatment before you return home."

This covers most situations doesn't it? The hearsay on here is that people have been covered for all sorts without issue.

ozhappy981

Firstly, virtually everybody has to pay the basic Medicare levy of 1.5% (there are some exceptions, e.g. people on very low incomes). Therefore, even if you came out with a "visitors policy", you would still have to pay the 1.5% levy.

Secondly, if as a single person, your adjusted taxable income for the year ended 30 June 2010 was above $73,000 (for 2011: $77,000), then you pay the 1% Medicare levy surcharge unless you have a complying health insurance policy.

For a single person, a complying policy would be one that provides basic hospital treatment in a private hospital and has an excess of below $500. Your Medibank "Young Hospital" policy looks like it would meet the definition (from what you wrote), which means you'd then be exempt from the 1% surcharge. (You still have to pay the 1.5% ordinary Medicare levy.)

You can then work out that if the premium for the policy is less than the 1% surcharge you'd have to pay, then you are better off taking out the policy.

stuie83

Great - many thanks for your responses. Things are clearer in my mind now.

fish.01

Note the 'extras' part of private insurance is not required to get a surcharge exemption.

JAJ

Those not eligible for Medicare, who have a certificate to that effect, are normally not liable.

verystormy

Be very carefull which insurance you take out as nearly all dont allow a claim with the medicare levi for those on 457 visas. We have been with several and now the company i am who provide free health insurance have signed those of us on 457 visas up to a specialist provider that does allow us to claim it.