Ah, tax time. That wonderful time of year when you remember all the things you set out to do last July to make this July a little greener. If, like us, your good intentions and healthy tax habits diminished as quickly as you can say Medicare Levy Surcharge, we’re here for you.
In fact, this year, we threw it out to you to uncover what your burning health insurance questions were because let’s face it, health insurance know-how changes depending on your age, circumstance and, well… even gender.
So to serve up the answers to your health insurance questions in time for your tax return (cue: Cardi B’s ‘Money’), we teamed up with ahm Health Insurance and Co-Founder of Ladies Talk Money, Jess Brady.
What does MLS mean?
The Medicare Levy Surcharge is an additional tax on your income if you earn over a certain amount (normally about $90k for singles and $180k for families*) to ‘incentivise’ you to get hospital cover with the idea being this helps reduce Medicare costs for the government and takes the pressure off the very busy public hospital system—we love you, healthcare workers! The additional charge ranges from between 1% to 1.5% of your income.
*If you have kids your income threshold increases by $1,500 for every additional child after the first one.
If I’m over 30 and earn over $100K, is the extra tax less than or more than paying the insurance?
So, given you’re earning good money (go you!) and assuming you’re single—not having health insurance means you need to pay the Medicare Levy Surcharge (see above)… BUT, that’s not all—if you’re 31 or over you also need to pay the Lifetime Health Cover (LHC) loading. It’s a charge for every year you didn’t have (or keep) private hospital cover. It's normally 2% for every year you didn’t have it until you’ve had private health care for 10 continuous years. So, if you wait till you’re 40 to take out cover you could pay an additional loading of 20% for 10 years! Isn’t being an adult fun?! You can read more about it here.
Should I get joint health insurance with my partner?
The very easy answer here is… it depends. Financially intertwining your relationship is a big deal, so you want to make sure you’re doing so only after having really good conversations about your money beliefs and goals and making sure they are aligned. Money is the number one reason for conflict in couples and yet you would be astounded at how many people I see who have been together for years and never talked about money!
The practical thing to consider—look at the current cost of your individual covers vs joint cover to weigh up the cost difference. Do you want the same benefits at the same tiers? If not, how will you manage that? Will you lose any benefits you currently have (or restart waiting periods) if you move to a joint policy?
Does it become exy to have/not have health insurance when a woman turns 30? Does the same thing happen to men?
Yes, it can become exy when you’re over 31 or you’re earning a good income (see points 1 and 2 above). Though this happens to everyone and not just women.
What health insurance should you have before trying to have a baby?
You need to do your research here and think about what’s right for you and your family. Are you wanting to have a baby in a private or public hospital? Will you use an obstetrician? Do you want your baby to be covered post-birth for medical events? Make sure you check policies to see exactly what is covered and what the caps are (make sure you know what your out-of-pocket costs might be—because whilst they are damn cute they can also be damn expensive, so do as much research as you can ahead of time). Also, consider if you need to hold the policy for a certain amount of time before you can use the benefits.
Why do premiums go up every year?
There are normally a couple of factors at play here. If more people are using hospitals then there needs to be more staff, beds and facilities to cope with that—throw in an ageing population with complex needs and it makes sense they keep going up. Also, consider that new treatments are typically quite expensive, along with good ol’ inflation.
While health insurance and tax can be complicated, ahm has your back by making things simple and straightforward—so you can spend less time worrying and more time living your life and doing the things you enjoy. In fact, this year ahm won a Canstar award for Outstanding Value Health Insurance. If you’re questioning whether or not your health insurance is worth it or if you should take out private health insurance this year, be sure to check out how to get the most of your extra covers with ahm here and their tax calculator here.
Disclaimer: The financial information contained in this piece is general advice only, and doesn't take into account your personal circumstances or needs. You should always seek professional advice before making any financial decisions.