bigpaul

Sorry to ask this question, I'm sure it's been asked a million times, just that I can't find it??

We have just received a letter from the DOI recommending we take out private medical insurance as if we don't, we may be subject to paying around 20% if we use Medicare, should one of us be unfortunate enough to fall ill (We have been in Oz 10 months now and loving every minute might I add!!) We have until we have been here 12 months to arrange this so the letter states!

I have also heard stories that at this time of year a person may need to pay around a $1000 Medicare levi, if they don't have private medical insurance when completing a tax return...how much of all this is true?

If we do need to take out medical insurance, does anyone have any recommendations!!!

Thanks in advance

Paul

Sherro

Hi sounds about right, I am on the 457 and use IMAN which covers me for everything, you probably have reciprocal cover being a brit on medicare which mens you also have to cough off in full for elective surgery. I pay $358 per quarter for me and my partner and and have full cover and wont have to have a medicarelecy (usually about $570) taken out of tax return.

IMAN specialise in health insurance for non perm residents and cover you things like repatriation so they may be worth looking at.

Cheers

I struck a deal with my work that if they paid my LAFHA I would get medical cover and indemnify them from any big claims.

quoll

Every tax payer pays a medicare levy of 1.5% of taxable income. However if you earn over a certain amount then you are slugged an additional 1% of taxable income (medicare levy surcharge) if you dont have private health cover - I think it is $70k for a single and $140k for a family but you would have to check that - the threshold recently went up. So yes your surcharge could be $1k or more all depending on what you earn.

The reason you have had the letter is that there is a bonus for joining within the 12 months - if you leave it longer than that then you will be paying an age related premium so the older you are the higher the premium whereas if you join within the 12 months you would be paying baseline premiums - as if you were 30 years old (premiums increase after that).

If you are here on a 457 visa then you are supposed to have private health anyway even if you are from UK originally and able to access medicare through the reciprocal arrangement.

You can start checking out private health options at www.iselect.com.au but not all of the private companies are on it - good starting point anyway.

ABCDiamond

Who is DOI ?

To confirm quoll's post:

bigpaul

Sorry, the Department of Immigration and we are on a PR 136 Visa!!

LM109

Hi paul
You will be hit with the medicare levy surcharge and it works out at about $1000. It is calculated when you do your tax return and the only way out of it is to have private insurance that includes hospital cover. If you only have cover for part of the year you will have to pay the levy for the part of the year without insurance. It has nothing to do with being an immigrant, this rule applies to everyone (dependant upon income).
Lisa

ABCDiamond

They will be referring to the ...

Lifetime Health cover loading
At 2% per year loading, (above age 30 for Private medical insurance), are you by any chance 40 years old ? to get to the 20% they have mentioned.

It won't affect anything that you get under Medicare, except of course the Medicare surcharge if your income is above the $73,000 and $146,000 thresholds.

Some surcharge examples without Private Hospital cover:

bigpaul

We are both over 40...ish!

If we get private insurance are we still going to pay the levy and am I reading it right that their recommendation about private madical cover is correct then should we fall ill, then we will need to foot around 20% of the Medicare bill?

Thanks again

Paul

ABCDiamond

If you get Private Hospital cover, you will NOT pay the 1% Medicare Levy Surcharge.
You will however, still pay the normal 1.5% Medicare levy that everyone pays.

If you take out cover before your 12 months is up, you pay normal Private Health Insurance rates.

If you take out cover AFTER your 12 months is up, you pay normal Private Health Insurance rates + 2% per year over 30, ie about 20% extra (for 40yr olds) on your premium.

There is no 20% of Medicare Bills payable. I think you 'may' have read that bit wrong.

bigpaul

So to get this clear in my head as I am thick!!!

Without Private Medical Cover

We will need to pay the normal 1.5% Medicare levy (that everyone pays)

We will also need to pay a 1% Medicare Levy Surcharge

If we decide to take Private Medical Insurance after our 1st 12 months in Oz it equates to the policy premium + 2% per year over 30, ie about 20% extra (for 40yr olds) on your premium

With Private Medical Cover

We will still need to pay the normal 1.5% Medicare levy (that everyone pays) Apart from our policy, that is all!!!


I get the feeling in all of this that the Government are pushing people toward Private Medical Cover, as they are in the UK? The extra 1% Surcharge could equate to around $1400 dollars, as explained by ABC Diamond - which is only a little short of what some policies are quoting for the year! Plus there is dental cover built in which on my recent visit to the dentist set me back some $250 and when you have a wife & two kids???

Hope I've finally got this right in my head...thanks everyone for your help. If I knew you were in Viccie Point ABC, you could have popped around for a beer and a barbie to explain as we're only in Redland Bay!!! Thanks very much for your help!!!

Paul

ABCDiamond

It looks like you have it and yes... This surcharge is designed to try to reduce the demand on the public system, by persuading people to take out private hospital cover.

Next, you need to ensure you find a Bulk Billing Doctor... and where to buy everything at the best prices... maybe it will be a case of popping round

How long have you been here ?

bigpaul

We've been in Oz for 10 months - In Redland Bay for getting on 3 months now and loving every minute! Gorgeous here...getting a strange urge to buy a boat though, never had that kind of a feeling before!! Was sat at the ferry terminal here yesterday for ages, taking in the sun and just watching the boats come in and go out...sad but really enjoyed it!!

There's actually a bulk billing doctors here in Redland Bay so already on to that one. How long have you been here for?

Paul

ABCDiamond

In Vic Pt now for 6 years, (but Australia for 22-4 years).
My wife wants a boat as well now, but I am trying hard to avoid the subject. I don't like the water myself, but I have a nephew here who runs a local Boat licensing service.

bigpaul

Thanks a lot for your help, I owe you a beer at the next Bayside meet up when evver that should be though we're planning on taking a look at the Sharks, not sure where you frequent!!

Thanks again

Paul

abner

"Every tax payer" is not accurate: there are several classes of "prescribed persons" defined under the Income Tax Assessment Act 1936 (section 251U).

For many readers of this forum (though not the OP, who has PR status), the class worth noting is in section 251U(1)(f): those not entitled to Medicare coverage.

Temporary visa holders should apply to Medicare for the Medicare Levy Exemption Certificate, which exempts one from both the base levy and the surcharge. (Edit: just saw from a different thread (credit to "Burbage") that this doesn't apply to those from UK, Northern Ireland, Italy, Malta, Sweden, the Netherlands, Finland or Norway as these countries have reciprocal Medicare arrangements with Australia. If you were living somewhere else before coming here then you can get the 1.5% levy back.)

But there's a gotcha, as I just found out to my cost: a temporary visa holder loses the exemption eligibility if he/she acquires a dependent who is eligible for Medicare.

"Correctly chosen" is important: it must be "private patient hospital cover" as defined by the ATO, from an Australian-registered fund provider. Not all private insurance meets this qualification.