Cheap Health Cover– Is It Worth It?

Many Australia’s don’t have private health insurance with concerns about the raising policy prices for even the cheapest options. The question for these individuals is at what stage is it worth having cheap health insurance vs having no cover and relying on Medicare. This is discussed below.

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* The price shown is per week and applies to a {LIFESTAGE} living in VIC with a $500 excess. It excludes LHC loading and includes a Base Tier Government Rebate

What To Consider

There are many things to consider when weighing up the benefits vs costs of private health insurance in Australia. One of the primary reasons that Australians choose private cover is naturally to avoid the public healthcare system which many regard as under-funded with long waiting queues. Even the cheapest health insurance policy will help the policy holder either avoid this system all together or be admitted as a private patient helping VIP treatment within a public hospital.

What many Australians though don’t realise that having a cheap health insurance policy can be financially beneficial in the long run. First and foremost, getting private health cover lets you avoid having to pay the Medicare Levy Surcharge (MLS) that is imposed by the government. For the budget minded, a cheap health insurance policy could be cheaper than the extra tax you would shell out for the MLS. It should be noted that the MLS only applies to those earning above a certain level with more information at cheap health insurance policy can be financially beneficial in the long run. First and foremost, getting private health cover lets you avoid having to pay the Medicare Levy Surcharge (MLS) that is imposed by the government. For the budget minded, a cheap health insurance policy could be cheaper than the extra tax you would shell out for the MLS. It should be noted that the MLS only applies to those earning above a certain level with more information at http://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/mls.htm

For example, Frank Health Insurance, offers a Basic Hospital package with premiums that typically cost lower than the minimum Medical Levy Surcharge (MLS) of 1% of your annual taxable income. A person who earns at least $90,000 up to $105,000 a year, and families that earn $180,000 to $210,000 are required to pay for MLS on top of their taxes. Depending on which state or territory you’re currently living, premiums for Frank’s Basic Hospital Cover can cost as low as just over $700 to below $900 a year for single people, and between $1,400 to a little less than $1,800 for families – these premiums are still less than the minimum MLS payments one would have to pay even if you belong to the lower end of the income bracket.

Government Rebates

To make private hospital cover more accessible and attractive, the government also offers rebates to significantly lower the cost of private hospital cover. Discounts from rebates can range from just below 40% to a little less than 10% of one’s premiums. Factors that determine how big of a rebate you will receive include your annual taxable income, as well as age. With these rebates, the cost of private health cover will be considerably less than paying for MLS.

Frank’s Basic Hospital Cover is the company’s most popular offerings; more than half of its policy holders choose to go with this cheap health insurance hospital cover. Frank is able to offer some of the cheapest premiums for private health cover in Australia, because its Basic Hospital policy is what’s known as a public hospital cover. This means that the policy holder is entitled to seek treatment from public hospitals as a private patient. Other major private health insurance companies typically offer private cover in private hospitals as their entry level health cover which results in much higher premiums.

As a private patient in a public hospital, policy holders can minimise long waiting lines that public patients have to queue up for. The public healthcare system, while quite adequate for many people’s needs, is already quite overloaded. The government and public hospitals have limited resources as far as attending to public patients. Public patients going through the public healthcare system who need treatments that are non-emergencies or non-critical have to sign up for long wait lists for elective procedures, which can last months or even years in some cases.

Frank Health Insurance also offers loads of options when it comes to its Basic Hospital Cover, so potential policy holders can tailor fit their health cover according to their preferences. One can choose to add some private hospital cover and Extras cover for general treatments like trips to the dentist, optometrist or physio therapist. Knowing what options to choose largely depends on your own personal circumstances and lifestyle preferences.

Of course, Frank Health Insurance also offers other levels or higher tiers of private hospital cover. Its Better Hospital Cover is a purely hospital cover with exclusions for certain procedures. And then there’s the Best Hospital Cover which offers full coverage for all treatment types and lots of private hospital conveniences. The last one is ideal for someone who doesn’t mind paying for complete peace of mind.

Lifetime Health Cover

Aside from MLS, the government also imposes other measures to ensure that more people take out private health cover. Those who are already over 30 years of age, yet still don’t have health insurance will be subject to Lifetime Health Cover (LHC) loading. For every year over the age of 30 that you don’t have health insurance, your premiums will increase by 2% and will be cumulative. So the longer you wait before taking out health insurance, your premiums will be more expensive when you do finally make the decision. It should be noted that even a cheap health insurance hospital policy will meet this requirement.

Overall

Without health insurance you typically will have no choice but to go through the public system and there could be significant out of pocket costs if services are not fully covered by Medicare. Private health insurance doesn’t need to be a big investment. Choosing a cheap health insurance policy can help lower out of pocket costs and you will be treated as private patient. You could also end up ahead financially by reducing tax and the penalties that can apply by not having private health insurance.

Join on combined hospital and extras cover by November 30 to skip 2 & 6 month waits on extras.*

Get a quote *12 month waits, annual and sub limits apply. For new members (if you have been a Frank Health Insurance member in the last 12 months, sorry you don’t qualify). Offer ends 30 November 2017