stuartsummers1980

I've just clarified that my wife and I don't need to worry about the medicare levy surcharge of 1% because we earn accumulatively less than $160k per annum but what is this I hear about needing to sort something out private insurance wise within 1 year of being in Aus to avoid the costs spiralling when you do get private insurance? Is this something you have to do to avoid the extra charges that come from being over 30? Or are the two completely unrelated? Thanks in advance for your help.

Bermudashorts

No that is it, there is an age loading for over 30's. Unless you take out private cover within the first year the age loading would be applied if you take out private cover subsequently.

If it is likely that your income will rise to above the medicare surcharge levy (of 160k or whatever) and stay above it year on year, then it is likely to be financially beneficial to take out private cover now. Because private insurance is cheaper than the medicare levy.

stuartsummers1980

Thanks. Makes sense.

Dreamy

You also don't need to get all the whistles and bells. Most (if not all) health insurance companies offer a policy which covers the minimum to avoid the age loading. (and the levy, for that matter)

nicolac34

So in our situation, we (just) earn under the $160k between us, but that's likely to rise over the next year or so - we are under 30 at the moment and will have been here a year in June.

So should we also get private health cover before we've been here a year?

I'd never heard of the age-loading or levy, so not really sure how it all works.

Grayling

The cost is increased by 2% for each year over age 30

Bermudashorts

Before you have been here a year or before you are 30, whichever is later, might make sense.

Wol

For you - and the OP - the situation is that in order to avoid paying a medicare surcharge (tax) in *addition* to the standard medicare levy you have to take out an allowable private insurance.

If you earn under the income that is set (look up the current amount) you only pay the standard medicare levy.

As regards the private insurance itself, the government sets most of the parameters for the whole industry. The premiums are set according to the age you are when you first take out the policy, and providing you don't let it lapse for more than a certain time they stay constant for all time even if you change companies. (That is, you don't pay more every year just because you are older: the premiums *do* rise like everything else with medical inflation, which runs well above the retail price index.)

If you are over 30 when you first insure yourself the premiums are 2% higher for every year over 30. So if the "under 30 premium was $1000 but you didn't begin until you were 40, *your* premium would be $1200 every year, with inflation on top.

That is the situation with "native" Australians: as a concession to immigrants, and to "encourage" them to take out insurance, if you are over 30 but take insurance within a year of arriving you are deemed to BE 30 and don't pay the 2% per year extra - for life.

There are some conditions: there's a maximum you can have as excess for example (to stop you having a massive one to get a tiny premium but still get the exemption from the surcharge).

Hope this clears it up?

nicolac34

That's a great help thanks!

ossigeno

Like most life sentences 'Lifetime Loading' in reality means 10 years continuous cover regardless of what age joined.

http://www.privatehealth.gov.au/heal...ealthcover.htm

Have had the bells and whistles private health cover for 5 years and seen the paltry contributions the insurance pays towards extras claims. Had I known what I know now 5 years ago I would only bother with bare minimum hospital cover. Everyone's circumstances will be different.