Tax time in Australia brings with it the annual rush of individuals seeking health insurance to avoid penalties like the Medicare Levy Surcharge or the Lifetime Health Cover Loading.
However, it is disheartening to learn that over 20,000 Australians waste a staggering $26.4 million each year on “junk” policies that offer limited coverage and fail to deliver real value for money. This comprehensive guide aims to empower Australians with the knowledge and strategies necessary to make informed choices when selecting health insurance during tax season.
Basic tier hospital cover is often the go-to option for individuals looking to meet the minimum requirements and avoid tax penalties. However, financial marketplace Compare Club highlights that for just a few extra dollars per month, a more comprehensive Basic or Bronze tier policy can provide significantly better coverage and value. While the average cost of a Basic policy stands at $101.33 per month, some policies can be as low as $79.15. Nonetheless, these Basic policies tend to offer limited cover, typically restricted to ambulance services and a small number of treatments.
Compare Club’s analysis reveals the existence of more affordable and comprehensive alternatives: Basic Plus and Bronze Plus hospital covers. Priced at $91 and $97.87 per month, respectively, these policies fall below the average cost while delivering enhanced coverage. By opting for Basic Plus, policyholders gain access to 14 items including hernia repairs, dental surgery, gynaecology, and tonsil removal, with only three restricted items.
Bronze Plus policies take it a step further, covering 32 full items, such as joint reconstructions, breast surgery, kidney and bladder procedures, and diabetes management, with just two restricted items. Choosing these options can potentially save individuals between $42 to $125 annually, all while providing a broader range of covered treatments.
Eli Boroda, a Senior Health Insurance Broker at Compare Club, emphasizes the need to avoid the pitfalls of choosing health insurance solely based on price. Merely opting for the cheapest policy may result in minimal benefits beyond tax savings. Regrettably, many policyholders only discover the limitations of their coverage when they require common treatments like wisdom teeth extraction or tonsil removal.
To overcome this challenge, Boroda recommends seeking assistance from health insurance brokers like Compare Club, who possess the expertise to cut through the jargon and facilitate side-by-side comparisons of multiple policies. By leveraging their knowledge, individuals can make well-informed decisions and select policies that offer the best coverage and value for their unique needs.
Top Tips for Value-Based Health Cover:
1. Opt for hospital or combined cover: To avoid taxes such as the Medicare Levy Surcharge and Lifetime Health Cover loading, focus on obtaining hospital or combined cover rather than standalone extras cover.
2. Beware of limited coverage policies: Steer clear of policies that solely provide ambulance and accident coverage, as they often lack comprehensive benefits.
3. Plan for the future: Consider your potential healthcare needs. If you anticipate wisdom teeth extraction or other common procedures, look for policies that cover dental surgery, gynaecology, hernia repairs, and tonsil removal. Basic Plus and Bronze policies frequently include these treatments.
For more information visit https://compareclub.com.au/health-insurance/medicare-levy-surcharge/
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