Howdy
If one's salary is below the threshold to trigger the medical levy surcharge. How does having private healthcare affect the medicare levy itself?
Medicare Levy and Private Healthcare
minty on 25/07/2022 - 11:33
Comments
So if someone is making say $70K (ML is calculated to be $1,400), having or not having private insurance with hospital cover would mean they will have to pay $1,400 in full?
Correct
Gottcha, thanks!
TBH i wouldn't be holding private health if below the threshold.
Maybe if you have a family would be the exception.And @Spal is on the money
^yep this - back in the day when i was still a casual worker, it did not make sense to take out private health as i wasnt using the benefits anyway (and even if you do, the benefits these days are pretty crap imo)
if you are over 30, you will need to consider if your income is going to surpass the threshold in the future.
This.
Exactly. And in addition to that it only takes one hospital admission to make you wish you got private.
Tummy pains? need a scope? massive public wait list Cat 3. good luck
Need your gallbladder out? Good luck. Wait in line.
Dog or cat bit you and now you need a washout cause your hand developed cellulitis (this happens all the time)? This falls under plastic surgery.. Good luck waiting for days in public to get a registrar to do a washout. People are often surprised hands come under plastic surgery. Same thing with cuts etc.
Broke a bone and need ortho? As above. Good luck waiting.
Public hospitals have their place and purpose. If you are sick you will be seen in the order of sickest to least sick. But for things as above, if you can afford private cover it's not a bad idea.
100% agree. Had major orthopedic work a few years back. Was able to select when I had the procedure, private room, physio and rehab were all part of the package, $27k total, with out of pocket being around $500. Given the discomfort prior to the procedure, glad I wasn't hanging around on a waiting list for a public hospital.
@leiiv: If you're boiling this down to numbers. How much is it to be in agony while waiting —unable to work or not have physio post surgery? Some things aren't just a numbers game.
I guess even the debate of whether or not to have it is more of a lower income Problem. Because at higher incomes the taxes make it a no brainer
@leiiv: Worth every cent, not having to be on a public hospital wait list, when you can't sleep due to the pain, can't walk at all. Even driving a manual was difficult, couldn't operate the clutch without pain. So being able to go straight in when I wanted, to quote an ad, was priceless.
@DashCam AKA Rolts: Lookup what Medicare would have paid to cover your treatment, then deduct your PHI premiums and excess and see what the difference is to that $27k. Would be interesting to see what actual cost saving you got by having PHI rather than just paying it out-of-pocket
http://www.mbsonline.gov.au/internet/mbsonline/publishing.ns…
@sheamas88: The value I received was full choice of surgeon, prompt surgery, not having to share a recovery room with a bunch of others, allowing me to sleep and recover, physio assisting recovery from day 1 post surgery.
@DashCam AKA Rolts: You misunderstand, your insurance would not have paid the entire $27k you owed for your treatment. At least a part of the costs would have been paid by Medicare, you can see what that would have been from the link I posted. Search for your procedure type plus all the related procedures and see exactly what Medicare paid out for your treatment to the private doctor/hospital. The difference between that number and the $27k is what your insurance covered.
If instead you never had insurance, you could still have gone to a private doctor and had Medicare pay some of your cost, but you'd have to make up the difference with your own money. Now to figure out if it makes financial sense to have insurance you'd have to figure out how much in premiums you paid and compare that to see if you actually saved money.
You misunderstand, your insurance would not have paid the entire $27k you owed for your treatment.
I understand fully. I am fully aware that Medicare would cover a certain amount of the procedure, hospital stay, medications, physio. Having private cover meant that:
1. I didn't need to find a large lump sum to cover the costs of going private.
2. PHI meant I had a great deal of control over my situation. Surgeons and anesthetists didn't hesitate, as payment of their accounts was assured. I could opt for surgeon of choice, private rooms, and extended physio without constantly looking at my bank balance or credit cards, or haggling with providers over costs.My NFP PHI has been great value when I look at it through the lens of the points raised above, especially as I also use the coverage for extras, not covered by Medicare.
@leiiv: If you're that keen on numbers, top table for hospital family cover, with Teachers' Health. You're welcome to look it up.
I understand fully. I am fully aware that Medicare would cover a certain amount of the procedure
Seems pretty disingenuous to compare that $27k cost to the $500 you actually paid in your OC then. I'm just trying to make it clear you you, and others that the difference between private and public in your situation was not $26.5k, it would have in fact been far less if you correctly compared it with all the premiums you've paid over the years (and continue to pay…) and what Medicare would have covered. Your OC leaves out a lot of info that makes PHI seem a lot better value than it really is.
- I didn't need to find a large lump sum to cover the costs of going private.
You wouldn't have to "find" the money, you would have had it on hand from not spending it all on premiums.
- without constantly looking at my bank balance or credit cards, or haggling with providers over costs.
Don't you do this for your insurance though? Or do you not evaluate your cover and provider regularly? If not, you are probably getting ripped on your coverage.
especially as I also use the coverage for extras
Extras cover has nothing to do with what we're talking about, extras and hospital cover are completely separate things. MLS (the topic of this post) still gets charged even if you have extras as it's the hospital cover that matters. Hospital cover also happens to be the most expensive part of private insurance. If you want extras cover that is fine, but hospital cover is questionable for the vast majority of young people.
@sheamas88: Any type of insurance can be compared to self insurance. You can put the predicted premiums away in a dedicated account and have the capital on hand when needed. Yet, how many will self insure their motor vehicle or home? I rate my health above each. I consider Medicare the equivalent of third party property, it's going to cover some of my costs, but won't give me the outcome I want.
Self insuring has two underlying assumptions.
The first is that you'll have the discipline and the financial security to do this, leaving the fund alone, even in times of financial stress.
The second assumption is that the adverse event that you are putting funds aside to pay for, lays in the distant future, allowing time to accumulate sufficient capital to offset the costs.
Not everyone is in a position to deal with the first of these conditions, and the second is a calculated gamble that may or may not fall in your favour.
As someone from an older demographic, PHI works for my family.Yet, how many will self insure their motor vehicle or home?
Any comparison of PHI to other types of insurance is useless for two reasons:
- The cost of not having PHI is artificially raised due to the MLS existing
- Trying to compare to self-insurance makes no sense as people are still covered by the public system
The fact that the government has to prop-up PHI with the MLS shows the poor value that PHI represents for most people. This is contrary to pretty much every other kind of insurance where the majority of people get it as they know it's a good value. Even if we allow the self-insurance comparison, your argument only holds fruit for the situation where you have a high care, high expense requirement AND is not prioritised in the public system. Self-insurance does not apply to any other situation since you wouldn't need it, as you would just go public. That's a pretty cherry-picked situation to make PHI sound good.
You can pay for private care out-of-pocket, so just save your premiums and IF you ever need private care then just pay for it. Medicare will still cover some of the cost, whatever is specified in the MBS, so you just pay the remainder. Don't get me wrong, the difference will still be a lot, but considering what hospital cover costs, and the chances of a under 40 person needing it, it's definitely worthwhile considering.
The vast majority of younger people would be far better off doing that than subsidising oldies private healthcare
@sheamas88: Im with you, i always have this argument with my parents who cant believe i dont have PHI and even with top cover PHI they end up paying quite a bit every time they have a procedure done and they still are no where near close to recouping the cost they have paid over the years. Personally as a family we have had several admissions to hospital for 2 kids with grommets, both me and my wife with septoplati and turbinectimy, my wife has had surgery on her back and tonsils removed all through public system with wait times resonable for what we needed. We had enough money to pay for private procedures if we felt the wait was too long but never needed to.
Have i been missing something? In my mind it's still way cheaper for me to only get PHI when I'm 40 and pay the loading for 10 years, than to waste paying for PHI for X years until we start making over the threshold?
Lifetime health cover loading is separate to the Medicare Levy Surcharge;
https://www.ato.gov.au/Individuals/Medicare-and-private-heal…
I know, I was referring to the comment where "if you are over 30 you need to consider if you're going to surpass the threshold". To me it's still way cheaper to pay for PHI + Loading when you surpass the threshold than to pay for years of PHI "just incase" no? Loading is also drops off after 10 or so years anyway.
@MeesusEff: Depends on your own health I guess. I have private health cover since I turned 31 to avoid the loading as I know I'll need surgery in the future (not sure how close or far off it will be as yet, but definitely do not want public hospital wait on it)
No affect at all. It would affect only if you have income liable for surcharge and have private insurance - hospital cover. Reduction of medicare levy itself is not based on if someone have private health insurance.