Proper medical insurance is an essential step you can take to protect yourself and your family. State governments worldwide develop a plan to cater to the healthcare needs of citizens. For example, in Australia, the Medicare system is in place to cater to the needs of the general public.
However, some Australians may have to pay more than others to fund this system due to income tax surcharge. In this article, we outline all you need to know about these levies and their financial implications for you. Below are specific differences between the Medicare Levy and the Medicare Levy Surcharge (MLS).
Medicare levy vs. Medicare levy surcharge.
The Medicare Levy is a tax that many Australians pay that the federal government uses to fund public healthcare. Many taxpayers pay this when they file their tax returns, whether they hold private insurance or not. This tax is approximately 2% of your income on top of the income tax you already pay. Alternatively, Medicare Levy Surcharge is a fee that higher-earning Australians without private insurance pay on their annual income. You pay 1%-1.5% of your taxable income if it exceeds $90K or $180K as an individual and family respectively.
The MLS is intended to ease the public health system’s burden by encouraging high-income earners to take private health cover. You’ll pay the tax for any period within a financial year that you don’t hold the appropriate private health insurance. As such, if you fall within the MLS income threshold, private health insurance is your best bet to circumvent the cost. The appropriate health insurance plan is needed to exempt you from this medical levy surcharge, as not all plans do. Good online comparison sites such as iSelect.com.au can help with these concerns.
iSelect.com.au helps Australian citizens to compare insurance, utility, and personal finance plans to ease their decision-making. They partner with some of Australia’s leading brands to bring you plenty of products, plans, and policies at your convenience. Their comprehensive information database about these service providers helps you make informed choices from comparison to selection. From price to convenience, iSelect.com.au helps readers find the best deals based on their unique filters.
Their friendly and helpful customer service team also helps customers find the best deals online by engaging them over the phone. As such, they take the hassle out of the whole process, saving you valuable time, money, and effort. What’s more, they aren’t owned by any insurance company, making them prioritize customer privacy. With years of online comparison experience, they have ensured customer comfort for many Australian residents for a long time.
Benefits of taking out private hospital cover.
Besides avoiding the MLS, there are several benefits to taking out private hospital cover. Private health insurance allows you to choose private hospitals for treatment compared to Medicare’s public hospital restriction. Also, you typically have shorter waiting periods for receiving treatment. These short waiting periods are beneficial for elective surgeries which often involve long waiting periods. You also benefit from dental cover under private health insurance, since Medicare doesn’t cover dentist visits.
Additional services like optical, physiotherapy, and psychology are also covered under private insurance. Private health insurance even allows you to select your preferred medical practitioner to perform operations. In public hospitals, your surgeon will be the doctor on duty at the time of your operation. Finally, people who sign up for private insurance before age 31 can avoid Lifetime Health Cover loading payments.
In conclusion, having a proper healthcare plan is essential to keep you and your family safe. By understanding the nuances of Medicare and the Medicare levy surcharges, you’re better equipped to choose plans that work best for you.