Medicare Levy Surcharge

Discussion in 'Accounting & Tax' started by coins, 8th Jan, 2021.

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  1. coins

    coins Well-Known Member

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    Medicare levy surcharge of between 1%-1.5% kicks in at $90k for singles & $180k for couples.

    Not sure how much private hospital cover usually costs, but it makes me wonder at what income level would you need to be at as a single person & a also as couple to get private hospital cover where it really makes sense to get this?

    Would that 1% or 1.5% really make that much difference unless you're way over the threshold?
     
  2. Joynz

    Joynz Well-Known Member

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    It worked out cheaper for me to get (very cheap) cover once I reached the threshold. It’s really the main reason I got private insurance.

    As I get older, my premiums have risen - so it’s probably about even now. But I like the ‘free’ Australian Unity dental checks!
     
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  3. Shazz@

    Shazz@ Well-Known Member

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    I don’t believe in private health cover, but only got the basic junk policy to avoid the surcharge.
    Just do the maths 1% of $90 000 = $900.
    My policy costs $780 a year, so that’s a saving.
    Also, once your over 31, there is a surcharge. Just have to weigh it up, no doubt, your salary may increase over the years too (including when you sell a property).
     
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  4. kierank

    kierank Well-Known Member

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    We are the opposite.

    Four years ago, the wife was diagnosed with breast cancer.

    The financial cost of her 2+ years of treatment $188,000 gross.

    Out of that, $128,000 was claimable on our health fund. We were refunded $111,000 (87%), leaving us $17,000 out of pocket.

    The remaining $60,000 was claimable on Medicare. We were refunded $39,000 (65%), leaving us $21,000 out of pocket.

    I have family/friends who say they don’t have/like private health insurance because they never claim on it.

    I tell them that I would pay the premium every year if it guaranteed we never had to claim on it ;).
     
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  5. coins

    coins Well-Known Member

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    It makes it difficult for someone who doesn't have a salary as it's impossible to estimate how much income it could be when it's all based on that person's skill in what they do. Eg. income could end up being $20k or it could be $200k.

    I believe private health insurance needs to be held for the full financial year as if it's held for half a year then you are only 50% off the hook.

    Difficult to know if it will be beneficial to get health insurance or not at the beginning of the year. Could very well end up just being a total waste of money if income ends not high enough.

    Have a relative that gives us free dental checks, fillings, etc. so that part of health insurance didn't provide any benefits.

    Another downside I see of health insurance in Oz is they don't pay 100% of your medical expenses, you're left out of pocket, sometimes with massive bills from what I've read in the past. In some countries overseas when you get health insurance, you get 100% medical coverage & hospital room coverage, up to the dollar value of the policy you took out. None of this nonsense out of pocket expenses we have here.
     
  6. coins

    coins Well-Known Member

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    Is the calculation 1% of $90k = $900

    or is it based on the Resident tax rates 2020–21 where the 1% extra (pushing it up to 33.5 cents tax) will start from income over $90k?

    Resident tax rates 2020–21
    Taxable income
    $45,001 – $120,000
    $5,092 plus 32.5 cents for each $1 over $45,000
     
  7. Shazz@

    Shazz@ Well-Known Member

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    1% of $90 000
    1.25% of $105 000
    1.5% of $125 000
     
  8. Shazz@

    Shazz@ Well-Known Member

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    Each to their own :)

    My own experience has been that the public system works just as well (this was also in treating cancer).

    My question to you was how much has your premium been over the years you have held the cover? More or less than $188 000?
     
    Last edited: 9th Jan, 2021
  9. kierank

    kierank Well-Known Member

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    I am pleased for you but we have family/friends who haven’t had very good experiences with the public system, in QLD and NSW.

    But as you say:
    How expensive do you think private health is?

    We have had private insurance for around 40 years. I haven’t gone back to add up 40 years of premiums but I know that figure is equal to 30+ years of our current premium.

    Since having cancer, the wife had 75% of her colon removed in an urgent 8-hour operation starting at 8pm. This was followed by considerable time in hospital, initially in ICU and then general ward. I am not interested in looking up what that cost us gross, funds refunded, etc.

    We are a fairly healthy family but, over the last 40 years, we have a number of hospital stay including the birth of our two children, our daughter breaking her arm, ...

    I know that over the last 40 years we have been refunded more than what we have paid in premiums.

    Maybe we have been one of the unlucky ones :rolleyes:.
     
  10. Shazz@

    Shazz@ Well-Known Member

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    Guess what I was trying to say was that if I wanted the private services in 30 years time (if I get really sick), I would just pay out of pocket. At least that way, I am paying for something I actually use. The cost would be probably very similar.

    Not having private cover doesn’t mean you can’t pay for services. Many people do this, e.g elective surgeries.

    Anyone would get emergency surgery, whether you are private or not.

    That aside, what an extraordinary woman your wife is. To survive breast cancer, and now having to adjust to life without most of her colon. Not easy.
     
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  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I have had relatives with cancer go through the private system.
    Perfectly fine I think - except for the shared room
     
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  12. MTR

    MTR Well-Known Member

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    Do you mean public.... ??anyways .... ditto

    Also public have a policy of performing more tests than private prior to any procedure, many dont realise this. Saved my partner’s life

    Another myth private is better than public
     
    Last edited: 9th Jan, 2021
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  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Sorry yes I meant public
     
  14. qak

    qak Well-Known Member

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    I'm not sure this is actually possible - I've heard if you don't have cover you still will not be able to go into a private hospital as a private self-funded patient in case additional complications arise.

    So the $188,000 quoted above might have been affordable to you but then there were unexpected costs of resuscitation and ICU when you suffered a heart attack on the operating table.
     
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  15. Shazz@

    Shazz@ Well-Known Member

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    I am not across all the rules, but know overseas people who have paid privately for major operations.
    For things like knee and hip elective surgeries, you can pay to get this done privately. I have in the past paid for tonsillectomy and removal of wisdom teeth and have gone through the private system, paying all cost myself.

    However, aside from that, what is the benefit of being a private patient?
    1) Your own room? (This is not even guaranteed and depends on the surgery)
    2) The benefit to be able choose your operation date and surgeon?
    3) Less waiting times to see a consultant?

    For the first point, I agree that as a public patient you may not get your own room.

    For the second point, if it’s a critical surgery, the public system will prioritize you. Also, generally best Drs are at the public hospital, not private. So this point is moot.

    Third point on less waiting time to see consultants- there is nothing stopping you from seeing a consultant in their private rooms. Sure, it will cost you ~$500 each time, but no need to wait and you can see them as often as you need. This is something I would pay for.
     
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  16. jaydee

    jaydee Well-Known Member

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    I have and fully support people that have private health cover.

    I have a family member that has private health cover, was diagnosed with cancer and then went thru the public health system using their private health cover (ie. the public system claimed the costs from the provider.). The net result was that the family member got the absolute best care from the best qualified practitioners at the best facility at a net cost of zero!

    I was very surprised at the excellent level of care provided and the zero cost to the family member which if charged would have been upwards of $30,000.

    Do yourself a favour and get the best private health cover you can afford. You may never need it but it gives peace of mind knowing you have it, as well you will be bloody glad you have it if it is ever required.
     
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  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Another point is the waiting period with public can be 12 months
     
  18. MTR

    MTR Well-Known Member

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    I wanted to go private for my daughter’s procedure, guess what ..... got put on a waiting list... same as public.... perhaps I was unlucky... no idea??

    there are flaws with both systems... there will never be perfect regardless

    ......and why many are leaving private... And fees are going through the roof, its not sustainable

    On a personal note....I have probably saved $200,000 going public.

    we have one of the best public health systems in the world. Either way its a personal choice, no right or wrong, we are very lucky to live in Australia
     
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  19. Shazz@

    Shazz@ Well-Known Member

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    If private health is so good, why go through the public system at all?
    This pretty much tells me that our public system is all that is needed.

    Seriously though, for those who have private health and have used the system, what do you get that the public patients don’t ?
     
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  20. Fargo

    Fargo Well-Known Member

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    This is incorrect some Drs may lack confidence and worry about complications but not all I was scheduled for a hip replacement at the Austin Public hospital but the stuffing around and inept administration was unbelievable, constantly needing tests and receiving notification of appointments a month late. Wanted me to travel backwards and forwards for blood tests and to repeat same scans, see a whole bunch of different doctors and a physio therapist told I would be hospital at least 1 to 2 weeks and need physio etc etc etc afterwards, it would appear they just want to line their pockets at tax payers expense. This B.S continued for a year. I dont have insurance It is better invest the money yourself and have your own insurance. I decided F this got an appointment with a Dr as a Private patient, he also works as a public Dr he told me they use inferior cheaper joints to save a little money that dont last as long in the public hospital.. After trying 3 hospitals he booked the theatre at the Epworth, Just rocked up 2 weeks later paid the admission fee had the operation was walking next morning and discharged after 2 more nights didnt need physio or all the BS the public hospital required. So easy and simple ! Done in less time the Austin took to send another reference for yet another test.. The tests the Public hospital wanted to do had to be partly out of my pocket and the anetheathist cost more too. Cost me near as much as the Private Dr fee. Three years insurance premium put on the stock market more than covered the extra the private surgery cost. Or to put it another way the gains I made on the stock market also paid for the surgery I do have friends and family that used the public hospitals for emergency surgery and cancer treatment I dont beleive the Public is inferior for cancer and emergency treatment. The problem with Public hospitals is Dictator Dan dictating and the centralization of Health services from before he became Chairman when he was health minister..
     
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