Do I need health insurance?

Private health insurance covers the risk of unexpected hospital costs. In Australia the public system can provide emergency treatment that is paid for by the government. However, Private Health insurance
gives people more choice around where they are treated and takes some pressure off the public health system. Because of this, our government provides incentives for people to take out private health
insurance. Like many ways to incentivise people there is the stick and carrot.

The stick is the Medicare Levy Surcharge. This is an additional 1% – 1.5% income tax that some taxpayers who don’t have private health insurance may face. You may have to pay the Medicare Levy Surcharge if
your income is above $90,000 p.a if you are single or have a combined income of over $180,000 p.a as a family.

The carrot is a government rebate on the cost of health insurance that many taxpayers will qualify for. The rebate is dependent on your age and income and ranges from 0% to 33%. The rebate percentages can
be found here.

Health insurance is broken up into two parts. Hospital Cover and Extras

Hospital Cover – cover’s you for the cost of staying in a Private hospital including costs for the accommodation food and basic nursing care. It will not always cover all costs for medical specialists however.
Hospital cover is what the government requires to avoid the Medicare Levy Surcharge.

Extras Cover – this can be thought of as discounts for seeing health practitioners such as dentists, optomotries, physiotherapists etc. Extras cover usually provides a rebate of the cost of seeing these specialists
up to a maximum rebate for each service during a year. For example 60% off dental bills up to a maximum rebate of $500 per year.

Great interactive article from the ABC –

Choice have some great calculators and advice

Calculator to see if you will save with Health Insurance
ATO Website

Private Health Insurance Rebate Calculator –