Since I found out I was pregnant, it gave me the push I needed to look into private health insurance. Even though I knew that the waiting periods would be too long if I joined now for any pregnancy cover, I still wanted to check it out.
I got some quotes over a month ago from two different companies and they were both between the $200-$250 range for basic hospital cover in a family package with $500 excess. If I included pregnancy cover the quote ranged between $250-$350. I felt that this was quite expensive and left it at that and didn’t pursue the quotes any further.
As the days went by and as tax time was approaching I started reading up a little more about the tax implications around private health insurance. I knew my partner and I were paying the Medicare levy surcharge but I didn’t know exactly how much we were paying as I never bothered to check. Big mistake! I also never researched if we could avoid paying the surcharge if we got the insurance.
So anyway, one day I received an email at work stating that the company has an agreement with a private health insurance company where they offer a corporate plan for employees with some good discounts. I was naturally curious so I booked myself an appointment with the consultant who was coming in to work the following week.
The consultation went well and I learnt the following things:
- The corporate policy offered to employees is different to the retail policy and with the discounts offered it works out to be cheaper than if I had not gone through my employer. The corporate policy also comes with an extras package whereas the previous quotes I received were for hospital cover only. I was quoted $216.40 for the corporate basic hospital cover (with $500 excess) plus the flex 60 extras package which includes $500 cover for basic dental, physiotherapy, chiropractic, osteopathy, natural therapies and $200 for optical items. I didn’t include any pregnancy cover.
- We will not have to pay the Medicare levy surcharge if we get the insurance. This made me curious at how much we paid last year so I went and looked back at last years tax return. To my horror we both paid around $6500!! If we had the insurance we would have paid just $2596.80 ($216.40 x 12). That’s around $3900 saved! Sigh!!
- I said I was quoted $216.40 for the insurance, however that also includes the lifetime health cover loading. I had heard about this in the past but never really understood what it all meant. Basically because my husband and I are both over 31 we get penalised 2% for every year we didn’t have private insurance after the age of 30. Without the loading our quote would have been $206.60 per month. Double sigh!!
So I have basically been kicking myself the last few days!
The second point listed above basically sealed the deal for me to get the insurance. I definitely didn’t want to continue paying more than I have to. We could have saved thousands had we signed up for private health insurance a few years ago.
Oh well better that I know now than later. You live and learn!
UPDATE: I didn’t end up saving money like I originally thought. I explain why in my follow up article.