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I'm confused about LHC and health insurance. Again.

I'm confused about LHC and health insurance. Again.

Old Sep 24th 2020, 12:30 am
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Question I'm confused about LHC and health insurance. Again.

Hi all,

Every year without fail, I get confused about the health care system in Australia. I'm getting better at it but I'm sure they make it confusing on purpose!

This time it's the LHC. Because of COVID, I can't continue with my gold premiums. I can't really afford ANY premiums but I am nearly 40 and have been paying for health insurance, including LHC, for a few years. I don't want to have to start paying the LHC again from scratch, if I cancel it for a few months. Reducing my cover to the most basic one they have might be a better option (even though it's a "junk" insurance), just to avoid this.

So, my question is this: I know that you can have up to 1,094 days of absence from health insurance, without having to pay an extra 2% on your LHC when you reinstate. BUT, will the absence reset the required "10 consecutive years" of paying LHC to zero?

Any help much appreciated.
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Old Sep 24th 2020, 1:03 am
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Default Re: I'm confused about LHC and health insurance. Again.

Originally Posted by red7 View Post
Hi all,

Every year without fail, I get confused about the health care system in Australia. I'm getting better at it but I'm sure they make it confusing on purpose!

This time it's the LHC. Because of COVID, I can't continue with my gold premiums. I can't really afford ANY premiums but I am nearly 40 and have been paying for health insurance, including LHC, for a few years. I don't want to have to start paying the LHC again from scratch, if I cancel it for a few months. Reducing my cover to the most basic one they have might be a better option (even though it's a "junk" insurance), just to avoid this.

So, my question is this: I know that you can have up to 1,094 days of absence from health insurance, without having to pay an extra 2% on your LHC when you reinstate. BUT, will the absence reset the required "10 consecutive years" of paying LHC to zero?

Any help much appreciated.
It's my understanding that the 10 consecutive years won't be reset, but rather will pick up where you were when you suspended your cover. But I'd be calling your private health provider, they're usually very good at assisting people and even more so currently. Private insurance is expensive at the best of times, and these aren't the best of times! Best of luck, hope things improve for you soon.
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Old Sep 24th 2020, 11:36 pm
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Default Re: I'm confused about LHC and health insurance. Again.

Originally Posted by spouse of scouse View Post
It's my understanding that the 10 consecutive years won't be reset, but rather will pick up where you were when you suspended your cover. But I'd be calling your private health provider, they're usually very good at assisting people and even more so currently. Private insurance is expensive at the best of times, and these aren't the best of times! Best of luck, hope things improve for you soon.
Sorry, I wasn't being clear (not my specialty! ) I meant if I cancelled my cover entirely, for a few months.

I finally heard back from my insurer yesterday and they are wiling to suspend my membership for 3-6 months. But for that, I need a signed statutory declaration, witnessed by a JP. The only local one is "closed until further notice", due to COVID, and I don't have a car. So doing this would mean a day trip. Basically, the whole thing has grown legs and I don't have time for it. I did the sums and I'll actually only be paying an extra $39 per month (or equivalent) LHC loading in ten years' time, if I have to start from scratch in a few months. Which beats the cr*p out of paying $100 a month now (when I really can't afford it) for a junk basic insurance.

Well, that turned into a rant but thanks for listening!
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Old Oct 14th 2020, 1:49 pm
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Default Re: I'm confused about LHC and health insurance. Again.

Originally Posted by red7 View Post
Sorry, I wasn't being clear (not my specialty! ) I meant if I cancelled my cover entirely, for a few months.

I finally heard back from my insurer yesterday and they are wiling to suspend my membership for 3-6 months. But for that, I need a signed statutory declaration, witnessed by a JP. The only local one is "closed until further notice", due to COVID, and I don't have a car. So doing this would mean a day trip. Basically, the whole thing has grown legs and I don't have time for it. I did the sums and I'll actually only be paying an extra $39 per month (or equivalent) LHC loading in ten years' time, if I have to start from scratch in a few months. Which beats the cr*p out of paying $100 a month now (when I really can't afford it) for a junk basic insurance.

Well, that turned into a rant but thanks for listening!
How does that $100 per month that you paid compare with the medicare levy (2% of your taxable income) you have to pay if you don't have private health insurance?

By my quick and crude (possibly wrong but happy to be corrected) calculation if you are on greater than $60k per annum you'll pay more in levy for not having the insurance than you are for the insurance. Do the calculator below against your circumstances to check.

https://www.ato.gov.au/Individuals/Medicare-levy/


Edit: Sorry, it's not the levy - we all have to pay that regardless. It's the Medicare levy surcharge. More details here:

https://www.ato.gov.au/individuals/m...evy-surcharge/

Last edited by paulry; Oct 14th 2020 at 1:56 pm.
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Old Oct 15th 2020, 8:25 am
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Default Re: I'm confused about LHC and health insurance. Again.

Originally Posted by paulry View Post
How does that $100 per month that you paid compare with the medicare levy (2% of your taxable income) you have to pay if you don't have private health insurance?

By my quick and crude (possibly wrong but happy to be corrected) calculation if you are on greater than $60k per annum you'll pay more in levy for not having the insurance than you are for the insurance. Do the calculator below against your circumstances to check.

https://www.ato.gov.au/Individuals/Medicare-levy/


Edit: Sorry, it's not the levy - we all have to pay that regardless. It's the Medicare levy surcharge. More details here:

https://www.ato.gov.au/individuals/m...evy-surcharge/
I didn't pay $100 a month. That was the quote for the junk insurance that I would have to take out to stop my accumulated LHC years resetting to zero. I decided it wasn't worth it and cancelled my insurance entirely in the end. I was paying $185 a month for full insurance previously, before I lost my job.
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