Health Insurance for Tax Reasons - Medicare Levy Surcharge

Gunther on 20/09/2016 - 19:06

Hi all,

I am young & healthy and have complete faith in the public health system in Australia! Single and no children.

Unfortunately (or not) for the first time I earn over $140,000pa so I will be required to pay the Medicare Levy Surcharge of 1.5% on top of my tax bill. I have never had health insurance but believe this is a big incentive for me to take out health insurance. Is anyone is the same situation as me and just utilises health insurance for tax reasons?

Looking for any deals on health insurance for tax reasons or the cheapest way to do this, any advice appreciated.

Financial

Related Stores

Services Australia
Services Australia

Comments

  • oscargamer on 20/09/2016 - 19:45
    -4

    get the cheapest
    not sure what's so difficult
    $140k a year and you can't work that out……….?

    • StewBalls on 20/09/2016 - 22:28

      $140k a year and you can't figure out how to ask your accountant…?

      Fixed.

      • Gunther on 21/09/2016 - 09:29
        +2

        Why would I have an accountant at this stage, I have only just started earning this money. Was significantly less before…

  • tebbybabes on 20/09/2016 - 20:31
    +1

    Yes, it is my impression that there ARE health insurance plans with spotty coverage or lots of exclusions. My impression is that these are for people who are after the absolute minimum in health cover - possibly as a way of avoiding the medicare levy surcharge, among other things.

    I have no hard facts or numbers, but it's a strong impression I'm getting.

  • TheMatrix on 20/09/2016 - 20:38

    use iSelect or similar service to do the comparision

    • currentfad on 20/09/2016 - 22:36
      +4

      If you do this, don't give them your phone number lol

  • kiribatian on 20/09/2016 - 20:49

    Smart move for getting it for tax purposes.
    Also agree re: faith in public health system. I think sometimes people/families get an idea that private is so much better. I would go private for the vast majority of elective procedures but I would mostly say to go public for most emergency presentations etc.
    I suppose you have to have a think about you need cover for: do you want extras (optical, dental, physio etc) or obstetrics etc you have to factor that in.
    I would maybe start with a comparison website similar to iSelect to give you an idea of different policies. (They can be annoying and call you after but I have found after 2-3 calls they stop.) Sometimes you can also get some good deals via these sites. For example, I was renewing my car insurance last year. I had similar prices directly from insurer after asking for discount and also via iSelect. However iSelect had a $100 gift card as well which the insurer would not match!
    {Not associated with any companies btw}

  • [Deactivated] on 20/09/2016 - 20:52
    +2

    I have years of experience in many sectors of the health care system.
    You will always need to get as much information as you can and make your own informed choice.

    That said, multiple research studies show private sector facilities result in significantly more adverse outcomes for their clients
    (17 % more in maternity and up to 100 % post operative infection rates in orthopaedics alone)
    and if you truly need treatment for anything serious you will end up in the public system in the end anyway

    Private health facilities (including health funds) are built to make money, nothing else.

    Your best strategy would be to bank what your private health contributions would have been and maximise your deductions and pre- and post-tax contributions for superannuation and other tax reduction strategies which will result in three sources of future wealth creation while maintaining a source of emergency funding if you're unwell.

    I am now in my mid-fifties with a healthy nest egg and I paid cash for the two instances I needed urgent surgery. You go to the best public facility available to you and pay for your own doctor and the medicare gap for your bed. It's called shared or intermediate care and means you get what you need when you need it without waiting.

    I am over the income test but with dependants and (legal) income reduction, I have yet to pay the surcharge once. I may need to one day but at this point I am tens of thousands of dollars ahead of the private health game

  • CyberMurning on 20/09/2016 - 21:00

    " I have never had health insurance but believe this is a big incentive for me to take out health insurance."

    not just health insurance but the one with hospital

  • CheapskateQueen on 20/09/2016 - 23:22
    +3

    The whole point of the Medicare Levy Surcharge is to encourage you to get private hospital cover. You're not "beating" the system. The whole point is to make you get cover.

    As for which cover, you need hospital cover not extras (extras are your optical, physio etc)

    I never had private hospital cover because i too trusted that in an emergency the public system would look after me. If i needed elective surgery i would have time to sign up and wait the year.

    Then reality happened and i fell in the middle. Not an emergency, but not an elective surgery. A health issue that required surgery and a surgeon who said i either do it now or he won't do it. Yeh. Wish i had hospital cover then :(

    You earn 140k. Don't be cheap on the one thing that matters most, your health

    • Gunther on 21/09/2016 - 09:45

      Not a matter of being cheap, but health insurance is very confusing (done with intent I am sure). It is very difficult to compare apples with apples when selecting a health package.

      • oscargamer on 21/09/2016 - 15:57
        +1

        your title is "Health Insurance for Tax Reasons"

        now you're asking about comparing apples with apples

        do you want health insurance? or do you want Health Insurance for Tax Reasons?

        if you want decent health insurance, that's a totally different question

      • CheapskateQueen on 21/09/2016 - 19:14

        Indeed they are two very different questions. If you're looking for the best health insurance option for you, you need to spend some time learning about the different products and services.

        Unfortunately, imo, you really just have to spend time learning.

        The cheapest option for tax purposes is just getting the most budget hospital cover you can get, with no extras.

  • tooblue on 21/09/2016 - 13:48
    +1

    Get married so that threshold will be $180K pa per family.

  • Gunther on 28/09/2016 - 08:54

    The answer was HIF GoldVital Hospital Cover. Absolute bargain!

    • Budgetcuts on 28/09/2016 - 13:14

      How much is it?

  • Gunther on 28/09/2016 - 14:08

    $850per year.

    I paid $620 upfront with full Government rebate - I will pay the additional up to the $850 at tax time. No other provider was even close.

    • Budgetcuts on 28/09/2016 - 14:23

      So I take it that that policy is the cheapest most basic thing to avoid the m.l.s.?

      And I take it that you have done your research?

      • Gunther on 28/09/2016 - 14:49

        Full accidental hospital cover and a few other basics - max $500 excess. 100% avoidance of the Medicare Levy Surcharge.

        Its definitely the best value I could find!

        • Budgetcuts on 28/09/2016 - 15:34

          Ok thanks. Will sign up for it asap.

  • Hogg on 11/11/2016 - 18:06

    Would this help? https://www.ozbargain.com.au/node/274889

Login or Join to leave a comment
Login Join