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Reciprocal Medicare or Private Health Cover on 457?

Reciprocal Medicare or Private Health Cover on 457?

Old Nov 4th 2013, 7:47 am
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Default Reciprocal Medicare or Private Health Cover on 457?

I have been in Australia for a month and I am being sponsored for a 457 visa.

If I take private overseas insurance, and DO NOT apply for medicare reciprocal at all, do i still pay for medicare from my wages? Is this a viable route?

The alternative, I guess, is to get my reciprocal medicare card and not take insurance. But i understand that because I am 30 years old, I am hit with a 2% increase in medicare tax costs each year? Or does this not apply if I am not a permanant resident?

My de facto girlfriend and I will earn around 160k and I am trying to work out the most cost effective way of covering us...

Hope someone can help... its a minefield!
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Old Nov 4th 2013, 8:13 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Think you're a bit confused.

You will pay the normal Medicare levy of 1.5% as you are entitled to Medicare (whether you use it or not). This assumes you are from the UK so are entitled to it under the reciprocal arrangement.

If you don't take out Private Hospital insurance you will pay an extra 1%-1.5% Medicare levy. This is because you're a relatively high income earner and the government wants people who can afford health insurance, to have it.

The annual 2% increase over the age of 30 relates to private health insurance premiums. It's nothing to do with Medicare. It's to stop people from taking out health insurance for the first time, once they get old and sick.

If I were you, I'd be using Medicare and taking out the minimum private hospital cover so you avoid having to pay the extra 1%-1.5% medicare levy. All the Health funds offer a lowish-cost hospital cover for this purpose. You don't have to use it, if you don't want to. Plus having it means you won't ever be hit with increased private premiums if you decide to take it out at a later date.

Last edited by NickyC; Nov 4th 2013 at 8:16 am.
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Old Nov 4th 2013, 8:46 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Thanks Nicky.

I was advised by BUPA that even if I have the reciprocal Medicare and am on a 457 visa I would have to go for 'overseas cover'. The problem with this - it is twice the price of cover for permanent residents. Is this correct? Do I have to go with the overseas cover at a cost of around 200 (minimum cover) dollars per month for my partner and I? Or can I get the standard insurance for residents?

To complicate things further, my accountant told me that I would still be obliged to pay the Medicare levy as overseas insurance doesn't include hospital cover? That said, my understanding is that the medical levy only applies if we earn over 168k (which we don't)?
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Old Nov 4th 2013, 9:03 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Originally Posted by paulwarwick
Thanks Nicky.

I was advised by BUPA that even if I have the reciprocal Medicare and am on a 457 visa I would have to go for 'overseas cover'. The problem with this - it is twice the price of cover for permanent residents. Is this correct? Do I have to go with the overseas cover at a cost of around 200 (minimum cover) dollars per month for my partner and I? Or can I get the standard insurance for residents?

To complicate things further, my accountant told me that I would still be obliged to pay the Medicare levy as overseas insurance doesn't include hospital cover? That said, my understanding is that the medical levy only applies if we earn over 168k (which we don't)?
I am pretty sure our basic hospital cover is $180 per month as permanent residents. For two of us, no health conditions and no age loading. So your $200 doesn't seem too bad really.
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Old Nov 4th 2013, 10:11 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Originally Posted by paulwarwick
Thanks Nicky.

I was advised by BUPA that even if I have the reciprocal Medicare and am on a 457 visa I would have to go for 'overseas cover'. The problem with this - it is twice the price of cover for permanent residents. Is this correct? Do I have to go with the overseas cover at a cost of around 200 (minimum cover) dollars per month for my partner and I? Or can I get the standard insurance for residents?

To complicate things further, my accountant told me that I would still be obliged to pay the Medicare levy as overseas insurance doesn't include hospital cover? That said, my understanding is that the medical levy only applies if we earn over 168k (which we don't)?
You definitely have to have the 'overseas' cover in order to apply for a 457 visa but you don't need to keep it once you get here. Most people from the UK on 457 visas seem to cancel it on arrival because they get the basics from Medicare under the reciprocal arrangement.

I'm not aware that 457 visa holders cannot get 'normal' private hospital cover, if they want it. Perhaps someone else can confirm that because I've not heard of it on here before.

And I just checked the salary limits for the Medicare Surcharge and it's currently $176k pa. So it looks like you won't have to pay the extra 1%-1.5% at all.

You're are certainly not forced to keep private health insurance on a 457 visa (if you get Medicare). It's up to you, if you want to pay for it.
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Old Nov 4th 2013, 11:01 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

I moved over on a 457. Lots of health insurers tried to sell me overseas cover when I wanted health insurance to decrease my tax liabilities. That was no use what so ever, as I would still have had to pay the medicare levi surcharge. Australian unity seemed to understand my predicament though, as I had reciprocal medicare cover they were happy to sell me a standard policy.
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Old Nov 4th 2013, 11:30 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

It's not exactly straight forward is it?!

So I can go straight to a standard healthcare cover. Is there any advantage to overseas cover? Or are they simply trying to sell me that because it's more money?
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Old Nov 4th 2013, 11:49 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Originally Posted by paulwarwick
It's not exactly straight forward is it?!

So I can go straight to a standard healthcare cover. Is there any advantage to overseas cover? Or are they simply trying to sell me that because it's more money?
You're right, health cover in Australia is anything but straightforward! I don't know how the overseas cover works but my husband and I (Oz citizens) pay about $350 a month for top hospital and extras private health cover, on top of the Medicare levy. Lots of differing opinions on whether it's worth getting private cover as well. For us it's worth it, others will think it's a waste of money.
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Old Nov 4th 2013, 12:57 pm
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

There is some confusion here that i think i can help with.

For those on a 457, in order to avoid the surcharge you need to have the visitors cover - otherwise it will not permit the tax advantage - i got stung with that one year. There are not many policies out there for 457 holders that allow them to take advantage of the tax in the same way PR holders do. BUPA is the one that i used.

When you do your tax return next July, it is probably worth talking to the accountant about it to see if it is worthwhile for you
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Old Nov 4th 2013, 4:11 pm
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

There was a post on a board recently about a 457 visa holder who was denied free intervention because the procedure was classified as elective (IIRC it was a biopsy for a tumour or some such) and they were expected to pay. Bear in mind that reciprocity is not for anything and everything but for necessary medical intervention. They fully expect you to go home for some things or have private hospital cover - that's what I'd be doing, but, then, we had private health cover anyway because the waiting lists were awful for elective procedures.

Medicare will cover you for emergencies and GP visits but it's a gamble you take
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Old Nov 5th 2013, 8:59 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Originally Posted by quoll
There was a post on a board recently about a 457 visa holder who was denied free intervention because the procedure was classified as elective (IIRC it was a biopsy for a tumour or some such) and they were expected to pay. Bear in mind that reciprocity is not for anything and everything but for necessary medical intervention. They fully expect you to go home for some things or have private hospital cover - that's what I'd be doing, but, then, we had private health cover anyway because the waiting lists were awful for elective procedures.

Medicare will cover you for emergencies and GP visits but it's a gamble you take
You could be referring to a post I made a while ago about a patient who needed coronary angioplasty and it wasn't covered by reciprocal agreement because the procedure was deemed elective.
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Old Nov 5th 2013, 9:52 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Reciprocal care and what is covered.

http://www.humanservices.gov.au/cust...s-to-australia

Note that ambulance cover is not included, which could mean large bills in some states.
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Old Nov 5th 2013, 10:30 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Originally Posted by Dorothy
You could be referring to a post I made a while ago about a patient who needed coronary angioplasty and it wasn't covered by reciprocal agreement because the procedure was deemed elective.
Nope, but that's another, this was definitely a biopsy for a possible tumour. Just goes to show what is considered elective even though a family might consider it downright essential and urgent!
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Old Nov 6th 2013, 7:36 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

Originally Posted by verystormy
There is some confusion here that i think i can help with.

For those on a 457, in order to avoid the surcharge you need to have the visitors cover - otherwise it will not permit the tax advantage - i got stung with that one year. There are not many policies out there for 457 holders that allow them to take advantage of the tax in the same way PR holders do. BUPA is the one that i used.

When you do your tax return next July, it is probably worth talking to the accountant about it to see if it is worthwhile for you
When I was purchasing my insurance a few people tried to sell me visitor policies. When I asked if the policy would exempt me from the Medicare levy surcharge they said no, but they couldn't sell me a regular policy either. It seems from my experience and the experience quoted above if you keep ringing round someone will be able to help you out!

If your main concern is to avoid tax then check with the sales person that the policy they are selling you will exempt you from the surcharge before committing to anything.

One you finally have insurance you then have to get your head round why everything still costs a fortune and isn't covered by the insurance. I'm afraid the confusion just doesn't get any better.
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Old Nov 9th 2013, 5:01 am
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Default Re: Reciprocal Medicare or Private Health Cover on 457?

I'm finding the whole thing very difficult to understand.
We have a private policy with Iman Austhealth but we don't actually seem to be covered for much until we have had the policy for 12 months.
My son has had to have a small procedure and we are doing it through Medicare because the private insurance won't cover it.
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