MY MONEY WHAT ARE YOU PAYING?
IT’S WORTH IT
FOR THE PEACE
OF MIND
Name: Martin
Age: 31
State: NSW
Sydney man Martin is constantly on the move, with cricket every summer, football in winter, spin
classes, running festivals and yoga. He is healthy – and committed to staying that way – but he’s always
had health insurance. “I’ve always found it an investment worth paying for,” he says. “There’s a lot of
debate, and I think what potentially confuses the issue is when the focus is on taxes and rebates and
not on health coverage and treatment outcomes. We are fortunate to have a world-class public hospital
system, but I believe it’s good to have additional cover for elective treatments that you know you will
need.” Martin had four impacted wisdom teeth surgically removed in his early 20s, and hospital cover
provided peace of mind, he says. “The cover was worth it for being able to schedule it at a time of my
choosing, and having a private room for recovery.”1
What is he
paying?
Martin pays $1036 a year (well
below average for his income
bracket) for Medibank basic
hospital and basic extras. “This
includes a reduced rebate
because I’m a higher income
earner,” he says, “so I’ve opted to
pay the extra now instead of the
tax adjustment in my tax return.”■ Callout
Have you optimised part of your budget and want to share it with Money readers or maybe you need some help cutting costs? Email
[email protected]. We’ll be covering car insurance, eating out, internet, home and contents insurance and financial planning.
2
How does he
do it?
“Medibank had the best option
when I turned 25 and was kicked
off my parents’ cover,” says Mar-
tin. The policy had zero excess
for hospital cover for young
singles. “They are no longer
the cheapest, but they’ve been
good enough for me to stay.”
Once you’ve found a good price,
the next step is to get value for
money out of your premiums,
he says. “I buy a new pair of
prescription glasses each
year, and get about half
back on my annual
dental check-up, so
my extras cover is
worth it. Medibank
also provides a 15%
discount to existing
customers on trav-
el insurance, which
I took advantage of
for my next overseas
trip in May.”MONEY’S TIPS
- Don’t assume couples
membership is cheaper. Check
costs and extras cover. - Shop around to see if it’s
cheaper to have hospital and
extras with different providers. - Make sure your policy
includes ambulance cover. Not
all do and it can vary by state. - Only hospital cover delivers
tax benefits. An extras-only
policy will not exclude you from
the Medicare levy surcharge. If
you earn over $90,000 (single)
or $180,000 (couple) and want
to save on tax, make sure your
private health insurance includes
hospital cover. - Consider a higher excess
or co-payment. (To avoid the
Medicare levy surcharge, you
can’t have an excess more than
$500 if you’re single or more
than $1000 for couples/families.) - Ask your fund if it offers a
discount for paying by direct
debit each month. SHARYN McCOWEN
3
How you can
do it:
Martin’s tips- Pay annually before the
premium increase on April 1 each
year, or schedule six-monthly
premiums to be paid in March
and September. - Take a good long look at
extras cover. Don’t cover yourself
for alternative therapies if you
don’t need them. - Read your policy to find
what other benefits your
health insurance offers, such
as discounted travel insurance,
subsidised gym membership or
discounted movie tickets.
Health insurance
HEALTHINSURANCE^ SPENDING$1036
Martin
spendson health
insurance each
yearSource: iselect.com.au. Based on a 31 year old
single male living in NSW on a basic
hospital and extras policyAnnual cost (including
rebate) according to income tier
Under $90,000
$90,000-$105,000
$105,000-$140,000
Over $140,000$1206
$1347
$1488
$1629