Medicare Levy


Apologies if this has been covered before.
I also would contact my accountant, but Its a public holiday and I'm keen to get further opinions :)

So, up until now i've not had any inclination to purchase private healthcare, I'm an active 31( hence the rush) year old who has had no need for heathcare( just Lucky sofar I guess)
My partner is full time studying so our combined income is below the 180k mark( mine over 100k but we should be assessed as defacto I believe)

So my question is am I going to save any money if I purchase Private healthcare?, I see that I paid approx 1500 in medicare levy last year and my partner( who has private healthcare) paid 140 ( could be due to her income tho)

I'm quite unlikely to utilize any of the services that come with private healthcare( apart from maybe dental) so this seems like a waste.
I also understand the Lifetime Health Cover Loading, but also wonder if there is savings to purchase healthcare now.

All of these services I seem to pay for I get very little benefit from, I understand that this is the way insurance is, but my risk seems low and this is why I've not purchased up until now.

Hopefully there is enough info above :)

Zimby medicare is already at 2% of income.

Ambulances are expensive so are kids (which may be on the horizon).

Suss out the cheapest cover possible which gets you off the hook for a lifetime loading and compare the opportunity cost of not doing it until......

What's your partner's opinion?
Your profile picture shows medical equipment behind you. Are you in the game?

It's more than the simple sums.

Do you want your choice of surgeon if/when you develop a non-urgent problem that will take forever to be sorted out in the public system?

It's not about serious illness - if you get a serious illness such as cancer, etc, then broadly speaking you will be cared for well in a public hospital.

It's the annoying elective stuff you will have to wait - lumps, hernias, gallstones, haemorrhoids (up to 2 years+!!), orthopaedic injuries etc etc. Even your colonoscopy to investigate that bleeding. You are in Brisbane? Depending where you go, you might wait a year or more just to be seen. All this stuff happens to young people.

It's a no brainer for me (and my family), if only to avoid orthopaedic junior trainees attempting to fix me (as their first ever attempt) when I come off my bike, or obs/gynae trainees operating on my wife. No thanks.
You have to pay the medicare levy if you earn a reasonable income. What you may want to avoid paying is the Medicare levy surcharge (MLS). This kicks in for singles at a base income of $90k and couples at $180k. The MLS is between 1-1.5% depending of your income. Check out the ATO site for details as to what is defined as income when calculating MLS because it does take into account net rental loss/gain. If the cost of the MLS is greater than the cost of basic hospital insurance then its worth it. I have the most basic possible policy with the highest excess to avoid MLS, no extras cover cos i dont need it.
As an extra note to above - you dont pay the MLS if you have private hospital cover for the entire year. Need a policy from July 2015 to avoid paying MLS EOFY June 2016.
Yes pro rated - so if you take out hospital cover now you will still be up for the surcharge for most of the year.

MLS is 1%, 1.25% and 1.5% for incomes over $90k, $105k and $140k respectively. So you could end up paying 3.5% in Medicare levy (1.5), MLS (1.5) and NDIS (0.5).

The Private Health Insurance rebate means testing works on the same thresholds. Once your income goes above 90k and $105k and $140k the rebate falls to 18.55%, 9.27% and 0% respectively. In both MLS and PHI the thresholds are double for couples and + $1500 for 2nd and each subsequent child.

The rebate %'s are falling by a weird little formula. Basically the rebate only goes up by CPI inflation divided by the average premium increase. It's designed to stop the entire health budget being eaten by the rebate because premiums are going up by 7-10% each year.

Income tests include adding back net rental losses, salary sacrificed super contributions and reportable FBT amounts (?) I'm not sure on that last one.
Wow thanks All.
Bran, not in the Medical profession, was just a visit where I snapped a selfie :)
Lines up with what I've been thinking, probably time to bite the bullet and take a minimum basic over.
Partner has good cover with added Babymaking option so she is not really fussed.
BOTH of you must have a private health policy. If she has cover and you don't then you BOTH get slugged a penalty of 2% of income. Its based on family adjusted taxable income (ie rental loosses are excluded) The insurance is generally cheaper than paying MLS of $2% x $180k = $3,600pa esp if you use an excess or a younger persons policy etc etc.
Around 20% rebate from the Govt reduces the cost further.

Contact iselect etc and discuss with the experts to identify the insurance you need and its cost. (You may not need hip replacements yet but need baby related cover at your age)
Wow thanks All.
Bran, not in the Medical profession, was just a visit where I snapped a selfie :)
Lines up with what I've been thinking, probably time to bite the bullet and take a minimum basic over.
Partner has good cover with added Babymaking option so she is not really fussed.

You should look at an option, if your partners cover allow you to be added as a partner. Having insurnce that covers both of you can be much cheaper than two separate covers.
I'd personally get one, especially when your income attract Medicare Surcharge.

I use the insurance mainly on the extra - yearly no gap dental treatment, this year - glasses, the remedial massages, acupuncture and osteo (75% back) :p