EOFY: What’s health insurance got to do with it? [Learn about health insurance in Australia]

This post about health insurance in Australia is a sponsored post written by Sophie Ryan, iSelect spokesperson

We are well into June now, and if you’re earning an Aussie income, it’s time to think about where you may have stashed those work-related receipts, because the end financial year is on its way! They could be scrunched up and stuffed into a shoebox somewhere, am I right?

You’d be forgiven for not giving tax time too much thought this year. We all lead such hectic lives, trying to make ends meet under extreme cost-of-living pressures. Work commitments, study, driving the kids around, finding time to exercise… maybe you’re still trying to simply settle into your new life Down Under. The do-to list can seem never-ending!

We know times are tough and stressful for many people, but as well as your yearly tax return, the EOFY is a great time to consider your household bills and expenses, especially private health insurance.  

Are you going to be up for the Medicare Levy Surcharge?

Private health insurance alone can be confusing, but in Australia we also have government incentives and penalties for health insurance. Let’s break them down, starting with the Medicare Levy Surcharge (MLS).

MLS is typically charged to all Australian taxpayers who do not hold an appropriate level of private hospital cover, and who earn above a certain income threshold. Generally, if you’re single with a taxable income of more than $90,000 a year (or $180,000 for couples) then it’s highly likely that you’ll have to pay the MLS.  However, for the first time since 2014, MLS income thresholds will increase on July 1, 2023, to over $93,000 (for singles) and to over $186,000 for couples/families.[1]

So, if you’re earning above the MLS income threshold and don’t have private hospital cover, this month could be the perfect time to consider taking out cover to help avoid getting stung by that extra tax.

What about Lifetime Health Cover loading?

For Aussies who don’t have private hospital cover by July 1 after they turn 31 (called the ‘base day’) and decide to take it out later, they’ll be subject to Lifetime Health Cover loading (or LHC). This is a government penalty that adds an extra two per cent to premiums every year they’re without appropriate cover. However, for new migrants to Australia, the LHC ‘base day’ could either be July 1 following your 31^st birthday, or the first anniversary of your full Medicare registration.[2]  So, now is a great time to get yourself up to speed on LHC and consider taking out private hospital cover to avoid that any extra costs.

Think about premiums

Historically, health insurance premiums increase on April 1 every year, but over the last couple of years, some funds have decided to defer their annual price rises. If you do have private health cover, your health fund is required to notify you when, if and by how much your premium is increasing in 2023, and that could be your cue to shop around, compare from a range of providers, and see if you could switch and save!

So, there you have it. Not only can your yearly tax return potentially provide a bit of a healthy boost to your bank account, but thinking about private health insurance could also put a few extra dollars back in your pocket, helping you say goodbye to FY23, and hello to FY24 with some extra peace-of-mind.

Disclaimer:

*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect will be available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. To view iSelect range of providers, visit: www.iselect.com.au/partners

 

[1] Source: Medicare Levy Surcharge (privatehealth.gov.au) & Paying the Medicare levy surcharge | Australian Taxation Office (ato.gov.au)

[2] Source: Lifetime Health Cover (privatehealth.gov.au)