Most people compare the market and purchase health insurance to avoid out-of-pocket expenses for services that are either aren’t covered or are only partially covered by Medicare. You also get reduced waiting times for hospital treatment, the ability to choose your hospital and doctor, access to a shared or private room in a private hospital and exemptions from government-imposed tax penalties and premium loadings.
Different policies will have different limits on the benefits you can claim in the year. Most of the time this means a maximum dollar amount you get back for a specific kind of treatment. Each time you pay for a particular service you’ll also have a set dollar amount you can receive as a benefit. For example your policy may have a maximum benefit limit of $300 a year for physiotherapy, and each time you go you receive $35 back as a benefit. If the service cost $50 you’d pay $15 out of pocket, and once you exceeded your benefit limit you would have to pay the full $50. However some policies offer a combined limit that gives you a total benefit amount to use for all your extras.
High income earners (individuals earning more than $90,000 per year and families earning more than $180,000) are charged the Medicare Levy Surcharge if they don’t take out hospital cover with an excess of a maximum of $500 (individuals) or $1,000 (families/couples). This is charged as a percentage of taxable income starting at 1% and caps at 1.5%.
Lifetime Health Cover loading applies if you don’t take out hospital cover before July 1st after your 31st birthday. For every year following you’ll be charged an additional 2% on your premiums whenever you do take out hospital cover up to 70%.
After purchasing your private health insurance you have a 30 day ‘cooling-off’ period that entitles you to a refund for any premiums you’ve paid, as long as you haven’t made any claims.
When you start a new policy or increase your level of cover you are subject to waiting periods before you can make a claim. For extras this amount of time is determined by the fund, however for hospital cover you will have to wait at least 2 months before you can make a claim, regardless of which fund you choose – although accidental injuries will typically be covered after only a day. For most pre-existing conditions and for obstetrics (pregnancy) cover the waiting period is 12 months. This waiting period is usually waived if you need treatment because of an accident. Additionally, if you already have health insurance and are transferring to the same or a lower level of cover you won’t need to re-serve your waiting periods.
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