Posted in Money on 15 May 2014 |
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Private healthcare consumers recently saw the biggest fee hike in nearly a decade. Premiums increased by an average of 6.2 per cent, while rebates were also scaled back to 96.8 per cent of the policy amount in what seemed to be a double hit to the pocket.
Although changes to rebate thresholds on July 1st may reduce some costs, Australians are left wondering why they should effectively pay twice for their healthcare.
Private versus public
Private health insurance offers a level of risk protection against a future incident, which without insurance could severely damage both your health and your finances. According to the government's Private Health Insurance Ombudsman, here's a quick guide to the winners and losers:
Financial considerations
Currently, taxpayers are subject to a 1.5 per cent Medicare levy. Those on modest incomes are subject to a 1 per cent surcharge. For people who are earning a reasonably high income, it can actually be cheaper to buy private insurance than pay the surcharge.
Another government measure to boost private insurance is Lifetime Health Cover (LHC), which adds 2 per cent to your premium every year you do not have cover after the age of 31. This can reach as high as 70 per cent and applies for the first 10 years of your hospital cover.
For fiscal 2014, singles earning up to $88,000 or families with up to $176,000 were eligible for the full 30 per cent private health insurance rebate. However, this is now being indexed annually from April 1st.
With both financial and personal health considerations, is private insurance worth the cost? For those aged over 31, the answer appears to be a qualified yes. Punting on your health may be a safer bet when young, but sadly those days don't last forever, and we're all getting older.