This was posted 4 years 2 months 2 days ago, and might be an out-dated deal.

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Cheapest Health Insurance Policies for Tax Minimisation: Frank - NSW/ACT | ahm - NT/SA/TAS/VIC/WA | Westfund - QLD | HCF - NT

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Cheapest Health Insurance Policies for Tax Minimisation: Frank - NSW/ACT | ahm - NT/SA/TAS/VIC/WA | Westfund - QLD | HCF - NT
Go to Deal
jon on 17/02/2020 - 20:29 choice.com.au (1603 clicks)
Last edited 18/02/2020 - 11:19 by 2 other users

Was looking online for the cheapest health insurance policies for tax reduction and came across this article from Choice which went through the cheapest (not best coverage) policies available for tax minimisation.

These policies are good for avoiding tax and loadings, but they provide very little health cover, and are NOT recommended by CHOICE.

These policies are essentially only useful for tax minimisation purposes but have essentially minimal to no cover outside of what you are already covered for by Medicare.
Only go for these policies if you have no intention of using your private health insurance coverage AND only want a policy for tax minimisation only.

For those that are unaware, anyone earning over $90k/year is subject to the Medicare Levy Surcharge
This is an additional 1-1.5% tax loading on your total taxable income. So if you earn $90,001, you will have to pay an additional $900 in taxes. As almost all of the policies below are under $900 for people earning $90-105k (except for (Vic and Tas), you would be better off paying for a useless health insurance policy rather than paying the additional tax.

Medicare Levy Surcharge
A 1% tax applies on your income if you don't have hospital insurance and you earn more than $90k as a single (double that for couples and families). If you earn more than $105k you pay 1.25% and if you earn more than $140k you pay 1.5%. If you take out hospital insurance, you're exempt from the tax, and in many cases it's cheaper to pay for hospital insurance than to pay the tax.

These prices are current until the next price increase on the 1st April 2020.

NSW/ACT - Frank (GMHBA) Basic 500 ($500 excess)

Annual Income Annual Premium
<$90k $781
$90-105k $868
$105-140k $955
>$140k $1042

QLD - Westfund $750 Basic

Annual Income Annual Premium
<$90k $658
$90-105k $731
$105-140k $805
>$140k $878

Victoria - AHM (Medibank) Starter Basic

Annual Income Annual Premium
<$90k $839
$90-105k $993
$105-140k $1027
>$140k $1120

South Australia - AHM (Medibank) Starter Basic

Annual Income Annual Premium
<$90k $794
$90-105k $882
$105-140k $971
>$140k $1059

Western Australia - AHM (Medibank) Starter Basic

Annual Income Annual Premium
<$90k $660
$90-105k $700
$105-140k $771
>$140k $841

Tasmania - AHM (Medibank) Starter Basic

Annual Income Annual Premium
<$90k $817
$90-105k $908
$105-140k $999
>$140k $1090

Northern Territory - HCF Accident Only

Annual Income Annual Premium
<$90k $330
$90-105k $367
$105-140k $404
>$140k $440

Health & Beauty Health Insurance Insurance Medicare

Related Stores

CHOICE
CHOICE
ahm Health Insurance
ahm Health Insurance
Frank Health Insurance
Frank Health Insurance
HCF
HCF

closed Comments

  • BearerOfDadNews on 17/02/2020 - 21:11
    +7

    why would you not pay a few hundred more and get a decent cover that helps you. if you do need to go - you get NADA from the above policy.

  • arctan on 17/02/2020 - 21:34

    Any other decent deals on health insurance these days?

  • stickyfingers on 17/02/2020 - 22:22
    +6

    Forum post

    • galileo on 18/02/2020 - 06:20

      Make sure you also use the report button (at the top), so it can be moved accordingly.

      • ihavecentsnotsense on 18/02/2020 - 06:32
        -2

        Lol It won’t be moved - the mods don’t do anything 99% of the time. If it gets enough votes, anything goes.

  • Flying Ace on 17/02/2020 - 22:28
    +10

    Propping up the crappy insurance companies because of bad public policy. I don’t think private health insurance is ever a bargain.

    I’d rather pay a few dollars more in taxes and support the public health system than give money to these charlatans to appease the government.

  • pyr0maniac on 17/02/2020 - 22:35
    +1

    Sorry I know this isn't really the place to ask, but:

    A 1% tax applies on your income if you don't have hospital insurance and you earn more than $90k as a single (double that for couples and families).

    If I am earning over 90k and my wife is not working, does that mean I am exempt from this additional tax?

    • jon on 17/02/2020 - 22:48
      +4

      Threshold for couples is 180k combined. So you can earn up to 180k without paying the medicare levy surcharge if your wife doesn't work.

  • coxymla on 17/02/2020 - 22:36
    +10

    Just wanted to point out that whichever way you go, you're propping up the public health system.

    If you buy junk insurance you are helping the private health risk pool which keeps more people in the private system and alleviates the demand on public health.
    If you pay the extra tax you are contributing to general revenue coffers which fund public health system.

    Pick your poison!

    • Sweetnsour on 18/02/2020 - 07:23

      Well said. Until a govt is brave enough to lift taxes and subsidise better healthcare. This is the system we are stuck with.

  • SpaceNinja on 17/02/2020 - 22:37
    +1

    The broken is system.

  • WillKillfor5Cents on 17/02/2020 - 22:38
    +1

    For these junk policies, is there any good hospital only cover that is offering intro bonus at the moment? Most sign up bonus I am seeing lately seems only for hospital + extras.

    • [Deactivated] on 18/02/2020 - 03:06
      +2

      Do a check on comparethemarket. Provide a fake ph number (or they'll spam you) and a real email address. A few days later you'll get an offer for a $100 gc for signing up for a hospital only policy and holding it for 45 days. Used to take 24hrs but last time I did this it didn't arrive until 3 days later.

      Westfund offer a $100 gc with a referral on hospital only, ozbargain referatron.

  • chumpychops on 17/02/2020 - 22:41
    +5

    Private health insurance is certainly a ponzi. As a health professional who frequently discusses insurance policies with patients from a customer viewpoint, I at least recommend not-for-profits (GMHBA, HCF etc.). We all know who comes first out of shareholders (BUPA, Medibank, NIB) and customers!

    • Vallani on 17/02/2020 - 23:02

      It’s a ponzi because of the community rating system.

    • snippy on 18/02/2020 - 01:47

      yup I think that is probably the best middle ground. Go PHI but pick a Not for Profit organisation.

  • frkino on 17/02/2020 - 22:44
    +1

    Love this info, +1 to OP

    With 01 April right around the corner, this will be great to get the updated rates.
    AHM just sent me mine (VIC), some 8.xx% bump

  • jaimex2 on 17/02/2020 - 22:51
    +2

    Wow, this is a dark bargain if I ever saw one.

    Babys first tax loophole.

    Is this a sneaky way to keep your foot in the door to avoid the whole 'you didn't get PHI before 30 so now you must pay catch up fee'?

    • [Deactivated] on 18/02/2020 - 07:47

      No this is avoid paying $1500 in tax by paying $800 for crappy insurance.

  • Vallani on 17/02/2020 - 22:57
    +4

    Great deal. To those complaining above - this deal is about purchasing a right to avoid a tax liability, not a health insurance product. If, like so many posters here, you never have any intention of using private health but would otherwise pay the surcharge, the rational thing to do is buy a product like this.

    • badwiring on 18/02/2020 - 08:42
      +1

      So this is for people who want to use the public health system but not pay for it?

      • [Deactivated] on 18/02/2020 - 17:49

        Still paying medicare, just not the mls.

    • Oofy Doofy on 18/02/2020 - 11:42

      Why not just pay the surcharge to help the socialised healthcare system? That is unless you want to use your policy for private admission to help the system that way.

      • [Deactivated] on 18/02/2020 - 17:51
        +2

        Why not pay full retail for everything to support the economy?

  • eggboi on 17/02/2020 - 22:57
    +12

    even if you're just getting PHI to avoid the medicare levy surcharge, you're still getting better value by avoiding these junk policies and getting the cheapest useful policy, or just paying the surcharge to help fund medicare instead of fill the pockets of PHI companies acting irresponsibly.

    • Tech45 on 17/02/2020 - 23:24
      +1

      Exactly

    • watwatwat on 17/02/2020 - 23:48

      you're still getting better value by avoiding these junk policies

      Well, it sounds like you're trying to make an ethical argument so saying it is "better value" isn't really true.

      • eggboi on 18/02/2020 - 01:39
        +1

        You’re only correct if you believe that paying private owners of ineffective PHI companies slightly less money is better value than contributing to public healthcare funding for society as a whole. You also cherry-picked my comment and only attacked one part of my argument.

        • redfox1200 on 18/02/2020 - 08:04

          Why would anyone want to pay an extra 1k-2k over junk insurance to contribute to medicare? Are you that generous?

        • watwatwat on 18/02/2020 - 09:33

          You also cherry-picked my comment

          Ok then, allow me to quote it further:

          getting the cheapest useful policy,

          Sounds incorrect. Link me to the private health package with benefits that is cheaper than medicare.

          paying the surcharge to help fund medicare instead

          Nope. Paying medicare is not "better value" to someone. "Better value" is to get the cheapest deal.

          I'm not even making an argument one way or the other. You the one who came out making claims about value that are false.

  • Aerith-Waifu on 17/02/2020 - 23:44

    Summary
    Your taxable income: $50,000
    Income tax payable: $7,797
    Medicare levy payable: $1,000
    Your income after tax & Medicare levy: $41,203
    Your marginal tax rate: 32.5%
    This means for an annual income of $50,000 you pay:

    No tax on income between $1 - $18,200 $0
    19c for every dollar between $18,201 - $37,000 $3,572
    32.5c for every dollar between $37,001 - $90,000 $4,225
    Income tax payable $7,797

    I thought its always 2%, not 1% to 1.5% according to this.

    https://moneysmart.gov.au/income-tax/income-tax-calculator, am I wrong here?

    • jon on 18/02/2020 - 00:11
      +6

      The medicare levy and medicare levy surcharge are different taxes.

      The surcharge only applies once your taxable income is above $90k and not staggered like income tax. So once you go $1 above $90k and you don't have private health insurance, you pay 1% of the entire $90k, not the $1 over.

      • Mrgreenz on 18/02/2020 - 00:36
        +2

        I can't believe this is true, what a rort, I wonder how many "buisness trips" the health insurance conpanies provided to pollies for this one

      • stinkydog on 18/02/2020 - 00:40

        That is nasty!

      • Aerith-Waifu on 18/02/2020 - 01:31

        Oh thanks for that, didn’t know

      • eggboi on 18/02/2020 - 09:43
        +1

        If you’re only over by a little bit, you could just make a small tax-deductible purchase or donation to a charity to bring you back under.

  • peterpeterpumpkin on 18/02/2020 - 00:05

    Since it's prorated it's not as useful for last minute capital gains events. For the minority of OzBargainers that make less than $200k in a normal year.

    • salmon123 on 18/02/2020 - 00:19

      Pretty sure most insurance companies will help you backdate a policy. It's free money for them.

      • ilikedeals on 18/02/2020 - 02:58
        +1

        True, free money for them without providing you any cover (they’ll tell you that you can’t make any claims for the backdated period!)

  • salmon123 on 18/02/2020 - 00:17

    The other way to do private health insurance is to get the best policy you can find, then look for a couple of dodgy providers with hicaps machines, figure out reasonable split and let them go to town.

    After you net it all out, you should be left with a decent hospital policy for a bit more than the basic one listed above.

  • Randolph Duke on 18/02/2020 - 00:25
    +11

    I’d rather pay the tax then prop up an industry that only survives because of Liberal ideology.

  • stinkydog on 18/02/2020 - 00:42
    +5

    Would be happy if the government was to abolish the private health insurance requirements and just taxed us more. Also believe a policy should be in place where companies recieving public funding (Medicare) should be at least 90% held by Australians.

  • Charity on 18/02/2020 - 03:30

    A plus for an interesting post. But wow, what a scam by the private health "insurance" industry.

    …BTW, even using the word insurance for these companies seems dirty and misleading. I noticed some slightly more scrupulous companies call their product a fund which seem more appropriate. And as the posted product demonstrates, since you can't claim on it, and it doesn't cover anything, it is anything but insurance.

  • screensaver on 18/02/2020 - 03:35

    The best deal I can currently find is Bupa second level, and 9saver has sign up bonus

  • Michaelz101 on 18/02/2020 - 04:21

    PHI is a scam until you actually need it. Many years ago I went through Medicare to get my ACL reconstruction. The registrar stuffed it up and I ended up getting another ACL revision a year later. I’ve been with many insurances now but I found HBF is the cheapest my far. Currently on Bronze hospital with standard extras (inc Orthodontist, speech therapy etc etc) for $243 from April 1 for a family of 4.

    • deme on 18/02/2020 - 08:37
      +1

      Does Bronze cover ACL?

  • DingoBilly on 18/02/2020 - 05:50

    I don't get this post. I can pay just a bit extra and get a decent policy that reviews well and is likely to help me if I need certain surgeries. As with most insurance, it's only a rip-off until you need it.

    Paying the minimum for junk seems pointless in comparison.

    • watwatwat on 18/02/2020 - 09:38

      As with most insurance, it's only a rip-off until you need it.

      And you never need it because we have universal healthcare.

      pay just a bit extra and get a decent policy

      Not really worth it. Perhaps for you wanting specific surgeries but not for others.

      • DingoBilly on 18/02/2020 - 10:51

        Eh, there's a certain surgery I need now which I can wait a year for in public or just get done in private in 1 month.

        I never planned for it nor thought I'd need it, and that's just how it is. Sure I'd get it done eventually in public but it's nice knowing I don't have to live with the inconvenience for a whole year.

        Again, it's great we have universal healthcare and it does work relatively well, but until you have unplanned issues that require more urgent care (that have a long waiting list) of course you'll say the insurance is a rip-off.

  • galileo on 18/02/2020 - 06:14
    +1

    Giving free money to PHI companies is not a deal. It’s never worth saving cents when it comes to your health!
    Please make sure you really understand how PHI could help you when really need it before going ahead with this atrocity.

  • Serpeant on 18/02/2020 - 07:56
    +4

    Do people realise that the "for-profit" health fund's main aim is to make a profit so they can distribute it to share holders?

    The way they make a profit is to take more premiums from your wallets and pay much less out in rebates for health services.

    The bottom line is, Health Insurance Companies are third parties sucking money from health. When will people understand this?

    The Government, forcing us to get worthless insurance policies is just wrong.

    • stinkydog on 05/03/2020 - 18:21

      Is it right that the not for profit ones are backed by for profit providers though?

  • badwiring on 18/02/2020 - 08:45
    +8

    So basically these companies can just name a figure that's slightly lower than the medicare levy surcharge for a given income bracket, provide absolutely nothing for it and rake in the cash? God damn I'm in the wrong business.

    • watwatwat on 18/02/2020 - 09:36
      +1

      It's kinda funny. I wonder if you could open a PHI company where it costs $50 a year and the deductible is $1 million.

      • Melburnian on 18/02/2020 - 18:02

        Excess must be no higher than $750 to exempt the customer from Medicare Levy Surcharge.

    • fez on 18/02/2020 - 10:33

      Exactly, it just pushing money into private companies rather then actually solving a problem.

  • tryagain on 18/02/2020 - 09:26

    Cue the posts in the future, I got sick and my PHI didn't cover my treatment now I am stuck with a massive bill, what can I do.

  • OZBMate8911 on 18/02/2020 - 09:26

    For those that are unaware, anyone earning over $90k/year is subject to the Medicare Levy Surcharge(ato.gov.au).
    This is an additional 1-1.5% tax loading on your total taxable income. So if you earn $90,001, you will have to pay an additional $900 in taxes.

    It's $180,000 combined for couples.

  • cowiie on 18/02/2020 - 09:46
    +2

    Yeah you are saving in the short term and allowing private corporations to benefit in this loophole that is suppose to benefit the consumer. In this case, it is only benefiting the private health insurance and still putting constraints on the Medicare system.

  • tumsum on 18/02/2020 - 10:19

    If your starting to get health insurance, when is the latest you need to apply for health insurance to avoid the surchage? Just before 30 june? this way you dont have to subscribe to too many months.

    • jon on 18/02/2020 - 10:36
      +3

      The medicare levy surcharge is charged pro-rata if you earn above the threshold. So if you earn over $90k and you only have private cover for one day in the year, you still pay the surcharge for 364/365 x 1% of your taxable income.

  • Salmando on 18/02/2020 - 10:24

    Conflicted. Paying an additional tax just because you earn a bit more than someone seems unfair, so getting around that is nice - but these insurances are just moving money somewhere potentially less useful…

  • fez on 18/02/2020 - 10:32

    I've been using westfund hospital only, purely to avoid the loading BS. however over the past few months been strongly thinking to ditch PHI completely and if i ever reach the tax threshold either just cough up the extra 1% or end up buying PHI again.

  • bman20 on 18/02/2020 - 10:42

    Your post had me interested so i went on Frank to check (as a NSW resident).

    Using your example of someone earning $90,001. Frank's website conveniently includes the private health tax rebate you receive so there is no need to calculate it.

    With an annual premium of $868, it is still substantially more expensive to take out private health insurance than it is to pay the tax.

    Your private health insurance premiums are paid with post-tax money while tax is naturally paid with pre tax money.

    In order to pay your post tax premium of $868, you will need to earn $1,159 before tax. As a result, it is ~29% more expensive to pay the premium than it is to pay the tax.

    from my sketchy maths it would seem that there is no way to take advantage of this if you are earning under $150k per annum as a single. even at 150k per annum as a single, you would be breaking even.

    • juntz on 18/02/2020 - 11:19
      +1

      The MLS is in addition to the income tax. Once you pay the MLS, you still have to pay income tax based on your full income (the MLS you paid is not deducted here). So I don't think you can say that MLS is pre-tax. With 90k income, you also have to add the Super that you received, so the taxable MLS will be more than the $868 insurance premium for sure. Unless you are willing to make true financial loss just to defy this policy, most people are compelled to purchase PHI.

      The MLS system is pairing so well with these private health insurances that I find it hard to believe there's no tunneling between the companies and the policy makers.

  • AbsX on 18/02/2020 - 11:26
    +1

    And this deal is proof why the private health insurance taxes through medicare levy surcharge propped up by the government is utter garbage.

    No disrespect to the OP for trying to help ozbargainers save a bit of money, just fury at the government for giving incentives to PHI companies to receive free money from hardworking Australians for no service. Makes the financial services industry before the royal commission feel like saints.

  • Oipjo on 18/02/2020 - 12:07
    +2

    Haven't seen it mentioned anywhere else in the post - so make sure to request they pump up your excess as high as possible once you're connected. Off the top of my head; its now $750 excess? At the time I did mine, most you can apply for online was $500, and have to call for the extra $250 - May save you a few extra $$ a year.
    I've made a point to my PHI by requesting a $10 million+ excess if they'd provide another $1/month off the premium; because I'd never admit to being PHI'd if admitted - unfortunately they are capped at amount of excess you can nominate. I'm fully aware it may result in longer waits for public, but as a currently healthy person; its' worth, until it's not - so for the saving of a few extra $$'s a month; that just goes to show how much we're getting jipped by this scheme.

  • csimpson on 18/02/2020 - 14:24

    I have a moral objection to buying utterly useless insurance that my partner and I will likely never use, BUT at age 31 and in the top bracket it's a no brainer for me to save ~$2000 at tax time. Just signed up to hospital cover through CUA Health JUST to get out of the Medicare Levy Surcharge - ~$1250/year for couples cover, better than paying ~$3250 in MLS out of my tax refund.

  • atrorz on 18/02/2020 - 15:46
    +2

    God, John howard ruined this country

    • JohnHowardsEyebrows on 18/02/2020 - 15:48
      +3

      We can only furrow ourselves in agreement.

      • atrorz on 18/02/2020 - 21:19

        if only you could grow long enough to strangle him

  • pmx7 on 18/02/2020 - 19:40

    Potential noob to health insurance;
    If you aren't sure what your taxable income will end up being for the coming year (started a new job, deductions etc so unsure if will stay under the 90k)…should you always choose the under 90k option and the tax man will make the necessary adjustment if you end up falling outside the maximum rebate threshold?

  • punkfans on 18/02/2020 - 22:31
    -3

    As a tax agent, this is obviously a scheme, only reason you sign up is for tax saving purpose, hence part IVA (general anti‑avoidance rule) should definitely apply here. Why the ATO allow this to exist is a mystery.

  • screensaver on 05/03/2020 - 20:25
    -1

    to all folks, make sure you stay on for 10 years straight then you will never have to pay the loading. I am stuck with 18% for another 9 years. I will probably do a lot of switching

  • suchan on 16/03/2020 - 09:08

    A friend of mine found (and joined) the MyOwn PHI, which will soon be rebranded to AIA.

    https://www.myown.com.au/en.html

    Price is a little more expensive than what OP researched. It's advertised at around $103 mark monthly (I couldn't get a quote from the website so you do have to call them up). However, what piqued my interest was their AIA Vitality Rewards program.

  • screensaver on 16/03/2020 - 10:54

    I still like my Qantas Health Insurance. They give me 520 extra QFF Wellbeing points every month based on everyone elses average steps, I dont have to lift a finger or toe. As I dont have an app or device, its free points. I also get points on my premium, loading and even rebate. Its only 17.98 a week and not many exclusions

    • screensaver on 03/04/2020 - 21:56

      Its also the only one you get referral bonuses on, including here, worth taking into account

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