Why should I get Health insurance?

The possibility to save on tax (Medicare Levy Surcharge) or additional lifetime health cover charges (Life Time Health Cover Loading) for those people affected is often a compelling enough reason to purchase health insurance, but what else should you consider?

Without health insurance, you may not be able to afford expensive medical services when you need them. Do you really want to be significantly out of pocket when you are sick?

Some of the top reasons people get health cover are listed below:

Health insurance may be able to pay for "lifestyle" services that you use often

Many people do not realise that you may be able to claim part of your gym membership joining fee or remedial massage costs on selected policies. Please check the policy details for services covered, including any relevant restrictions or conditions, limits, and waiting periods before any decision to purchase. Alternatively, your iSelect consultant on ph. 13 19 20 can assist with further information and clarification.

Get health insurance cover – you could save $$ on tax

For most singles with a taxable income over $90,000 ($180,000 for couples, families and single parents) the government will charge an extra 1% in tax. This is called the Medicare Levy Surcharge (MLS) and occurs if you don't have private hospital cover.

The MLS will increase to 1.25% if you earn over $105,000 ($210,000 for couples, families and single parents) and 1.5% if you earn over $140,000 ($280,000 for couples, families and single parents).

So depending on your circumstances, you may be able to buy basic hospital cover that is cheaper than the surcharge that has to be paid in additional tax. The government will then waive the MLS depending on the period you hold cover and the type/level of cover held, and you could walk away with a great health insurance policy!

Note: the figures quoted above are based on 2013-2014 figures. The income tiers will change as of 1st July 2014 for the 2014-2015 financial year. For additional information on the chagnes to the income tiers, click on the Medicare Levy Surcharge link above.

Can you afford to “self” insure?

Studies have shown that having health insurance can be a much cheaper option in the long run for some people.

For example - Self funded knee surgery could set you back up to $13,000 - to save this money before the surgery may be impossible for some.

If in the future, you find out that you need knee surgery (or some other elective treatment), you will need to have the right cover in place, and to have served any relevant waiting periods, or else you may have no option but to save for the surgery.

Waiting Periods; How long do you want to wait to be treated?

Are you prepared to stay on waiting lists for long periods to be treated in the public system?

With private hospital insurance you have a much greater chance of having your choice of doctor. If you're admitted as a public patient, the hospital assigns a doctor to you. Typically private patients may have shorter waiting periods for elective surgery.

‘Elective surgery’ refers to conditions that aren't life-threatening, but that doesn't mean it's not a painful condition or that it is unnecessary surgery. For example, if you need a knee operation or kidney stones removed…neither condition is usually considered life-threatening but the shorter the wait the better!

Choose the right health insurance and get peace of mind

Choosing the right Private Health Insurance can help put you at ease so that unexpected eventualities can be covered (depending on your level, type of cover and any relevant restrictions that may apply), with you and/or your family having greater control over the medical services you receive and the timing of those services.

Lifetime Health Cover (LHC)

You could end up paying more for private health insurance over your lifetime if you don’t take out hospital cover before 1 July following your 31st birthday. If you join after this time, you may be required to pay a 2% loading on top of your premium per year for every year you are aged over 30 and do not have private hospital cover, up to a maximum loading of 70%.

For example, if you take out private hospital cover at age 45 you may pay 30% more than someone who took it out at age 30.

The Private Health Insurance Act 2007 now includes a provision requiring health insurers to cease including the loading to the basic premium after ten years continuous hospital cover.

For the fit and healthy

People approaching an age where serious illness is considered more likely, or those who think they might need elective treatment, may decide private health insurance is valuable for them.

Some consider the “comfort factor” in private hospitals and the need for “extra” health services and the ability to stay at a hospital generally of your choice. Depending on the selected hospital and availability, some may also offer ‘luxuries’ such as single rooms, private bathrooms and TVs. Additional charges may apply for such services.

Extras cover

If you have regular trips to the dentist or physiotherapist, or you need glasses, (now or potentially in the future) you may want to consider extras cover, which you can buy with or without hospital cover.

You can also get extras cover that pays a benefit for natural therapies like acupuncture or naturopathy on selected policies.

Remember extras cover is the one area where you can actually get something back to help reduce your day to day out of pocket expenses - such as glasses, dental, chiropractic, massage and more.

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