Cheapest Health Insurance to Avoid Medicare Levy Surcharge 2021

In the true spirit of OzBargain - has anyone done the maths to find the cheapest health insurance purely to avoid the Medicare Levy. Does a policy exist that would be cheaper that the levy itself?

Comments

  •  

    How does this work? I have private health insurance and not signed up to Medicare but still have to pay the Medicare Levy on a 457 Visa.

    •  

      The perks of not being a citizen/PR.

      Honestly it is a bit crap given you have to take out mandatory private health as well.

      •  

        Why is it crap that non-PR's should benefit from a state run health care system?

        Should backpackers and all tourists have access to our Dr's and hospitals for free?

        • +4 votes

          It’s crap because as a non PR he can’t access Medicare but still needs to pay the associated taxes.

          •  

            @jaejae69: unfortunately that's the price paid to live in the Aust as an international PR.

          •  

            @jaejae69: That is not true, temp visa holders can apply and get exemption from paying the Medicare levy.

        •  

          Would you like to pay twice for a system you're already paying for?

    •  
      • +1 vote

        Unfortunately not. Submitted MS015 forms to Medicare Entitlement Statement Unit and got a rejection weeks later. Still have to pay thousands annually.

        •  

          Did they say why? Many many years back I too was on 457 visa and know other people who got that exemption.

  •  

    Following

  •  

    Is extras insurance enough or do you have to have hospital too?

    •  

      I just want to avoid the levy. Don’t really care what it is, and hopefully will never use it.

    • +2 votes

      My understanding is hospital cover is essential (with an excess of $750 or less) for MLS exemption if you earn more than $90K, whereas extra cover is optional.

    • +2 votes

      Hospitals is the minimum (don't need to get extras though). Extras doesn't help you avoid the levy at all.

  •  

    On the health insurance comparison websites, don’t they have a filter (I just want to pay less tax) or similar?
    I know “compare the market” does. cross referencing a few of these sites would be your best bet.

    •  

      Use the government site instead - www.privatehealth.gov.au.

      I generally check pricing every year and switch to whatever is cheapest. I pay for a year in advance before the annual price rise every year on 1 April.

      As mentioned lots of funds give offers if you join extras as well but check the fine print - if you don’t actually want this cover anyway sometimes it’s no cheaper to join extras and cancel later as the free period doesn’t kick in for several weeks (eg deal is often get 6 weeks free and the free period kicks in after 6 weeks).

      The government website doesn’t show discounts for paying yearly so also check that too by going to the fund website. Especially if the difference between the cheapest policies is very minor.

  • +2 votes

    frank basic hospital 500 is 17.55 q week 915 a year, o you could join one with 6 weeks free, medibank and aami at moment, aami is very reasonable

  • +1 vote

    I read someone once found a cheap one that also gave them one free dental visit a year.. that would probably be one of the better options. At least you get something for your money.

  • +4 votes

    I assume OP is referring to "Medicare levy surcharge" (MLS) instead of "Medicare levy".

    The cheapest private insurance I found is ahm: $1017.65 per year (a quote obtained for 40yo single in VIC who earns between 90,001 - $105,000/year, excludes Lifetime Health Cover loading)
    In this particular case, ahm private insurance will be (slightly) cheaper than the MLS only IF one's taxable income is more than $101,765 per year.

    Since the my MLS is somewhat in the same price range as my private insurance, and I still want to get covered for ambulance, also I want to avoid Lifetime Health Cover loading in case I really need private insurance when I get older, I decided to get private insurance even though I know I barely got covered for many things.

    • +1 vote

      This you can’t escape the Medicare levy, only the surcharge if that is applicable to you based on your income. You also need to get the PHI at the start of the FY, so it is now too late for the current FY.

    •  

      Just a note that if you expect your salary to gradually increase to eventually pass MLS limits, its better to take insurance early. This will ensure you won't pay Lifetime loading.

      So, if you wait until you are 45 and then suddenly become interested in private health insurance due to high salary, you would need to pay premiums about 2% per year calculated from 31 (28% for 45 yo).

      •  

        When I looked into it I calculated a couple of years premiums avoided outweighed the potential future cost of the lifetime loading.
        I guess if you know you are going over in one to two years it would be worthwhile.
        I actually went over about 16 years ago, but they increased the limits and I dropped back under again.

  • -2 votes

    If you're just on the cusp of the $90k threshold you could look into salary sacrificing into super to go back under the 90k amount or if you're looking at buying your first home the first home super saver scheme

    • +2 votes

      This doesn't work - salary sacrificing into super still counts the same towards your total salary for MLS purposes. Similarly, negative gearing etc. also counts the same (you don't get to just deduct the amount from your salary for MLS purposes, but rather - you ADD the loss as if it was a gain to your total salary).

  • +1 vote

    hbf has an annual discount if paid up front, Basic hospital Plus is 855 per year. less 6 weeks free affter 6 monthsTHe 6 weeks free usually only applies if you take extras as well,

  •  

    The Frank Basic Hospital 500 is a bit different, it covers almost all conditions as a private patient in a public hosipital, so is good value. The other ones cover almost no conditions as a private patient in a public or ptivate hospital

    • +1 vote

      By virtue of being in a public hospital you are cover for any and all conditions. Even the ones that haven't been discovered yet…

      I don't understand the value of a private patient in a public hospital except for day theatre cases, where private health covers the theatre costs.

      •  

        I pay a bit extra to cover as many conditions as I can in a private hospital too

      • -2 votes

        You get to pick your surgeon as a private patient in a public hospital.

        •  

          You have a list of desired surgeons at the ready?

          Honestly any 'private' benefits in public hospitals is all lobbyist marketing spin

          • +1 vote

            @Drakesy: "Free" Newspaper. lol

            •  

              @holdenmg: Haha, need to catch up on my Murdoch propaganda while I recover.
              But yeah, totally worth the $800 a year…

  • -1 vote

    So you’d rather line the pockets of the healtcare leaches than pay into the public health care that is the backbone of your private health insurance?

    •  

      when they spend 100 billion on submarines, irs just pissing againstt the wind

    •  

      I see where you're coming from and i totally agree that the lobbyists/leaches pushing for the two tier system are literally trying to keep the private industry relevant when it's on life support. However paying twice for the same scheme i feel is a bit rough, you already pay the medicare levy so i don't feel that you should be taxed further to get the same benefit.

      As it is if you make $90,000 a year you will pay $0 extra.
      However if you make $91,000 a year you end up paying $990.

      Literally working to pay the government 99% of your salary.

  • +3 votes

    Love it how many people have commented but very few have actually provided any useful suggestions.. classic OzBargain..

    I haven't checked out what is available recently but back when I was first hit with the MLS I went for the Bupa Active Saver health insurance with $100 copayment. This included both hospital and basic extras and I think I made an annual saving of around $200 (compared to paying the surcharge).

    Unsure if this plan is still available or whether it would still work out the same way anymore (my circumstances have changed somewhat).

  • +1 vote

    churn for free weeks and gift cards. the cheapest policy will vary on your location and age.

  • +1 vote

    I'm in the same position, just looking for basic health insurance to avoid the Medicare Levy Surcharge next financial year.

    I got these quotes below for single person cover, other quotes will differ based on the state/territory you live in, how much government rebate you're eligible for etc.

    HCF - $567.20 (quote) minus $70 (coles flybuys bonus for new members) = $497.20
    Bupa - $612.48 (quote) minus $70 (woolworths rewards bonus for new members) = $542.48
    AHM - $543.25
    NIB - $699

    I've gone with HCF cause they were the cheapest when including the coles flybuys bonus. It will be even cheaper cause they're offering triple flybuys points on fruit, vegetables and meat at coles until end of March 2022. Note that to get this coles offer you need to have flybuys and join with HCF by no later than 30 June 2021.

    • +2 votes

      How'd you get HCF down that cheap? The cheapest I could get it down to for WA single with max rebate was Hospital Bronze Plus for $787 per year.. Is there a cheaper plan available?

      • +1 vote

        I'm living in NT and noticed that it was much cheaper than other states. I don't know for certain the reason why, although the NT has a much younger population than other states/territories. It seems all the health insurance providers use some algorithm to adjust it based on which state/territory you live in. I'm not aware of a cheaper plan.

        I also got the Hospital Bronze Plus package.

      • +1 vote

        Salary might also be a factor, i.e. whether it's higher/lower than $90K does make a difference.

        •  

          I've noticed it's "rigged" to make the premium as close to the ATO penalty as possible. Curious of the consequences of understating your income (although I guess the insurers data share with the ATO too)…

  •  

    is there any benefit to buying a years private medical insurance before 30th June?
    (1st time private ins buyer - mid 40's, 90 - 140 k bracket)

    • +2 votes

      Pay an additional 1.5% in tax (~$2000) to the ATO via the Medicare Levy Surcharge, or pay ~$900 to a private health insurance company.

      Your choice :)

      •  

        if i'd done that before 30th June it would have had no bearing on 2020/21 tax year - but would for next it seems! i was getting around $2k with a 32% loading added so seems pretty similar either way