Private Health lifetime excess loading

[Bob]

I was looking at somebody's timeline with what they needed to do, on arriving in Australia . . . . 

 

-  Get a Tax File Number to give to your future employer

-  Get the kids into a school

-  open a bank account

-  get an Australian driver's licence

-  register for Medicare

 

The list is quite exhaustive and you won't get it all done in a day. Perhaps a week.

In all the rushing around, sometimes we aren't aware of some things.

 

When you are permanently resident in Australia, you're entitled to Medicare, which is Australia's "no frills" health and hospital cover for all its people.

However . . . . once you register for Medicare the clock starts ticking on the loading which you may have to pay on your private health insurance.

Generally, you have 12 months since you first register for Medicare to take out a private health policy without any excess charges, or you'll pay an extra 2% loading for each year over the age of 30 on your health insurance costs for the following 10 years.

If you are 40 years old . . . . that is 10 years over the age of 30 . . . . and you don't take private health insurance until well after 12 months on registering for Medicare, your health insurance premiums will cost you an extra 2% x 10 years = 20% extra on your premiums for private health insurance for the whole family. That will carry on so for the next 10 years before it is removed and you pay the basic premium like most other Australians.

I have a mate who is well in his 70s, from South Africa, who came over to Australia 8 years ago to validate his visa. He registered for Medicare on his first visit to Australia, went back to South Africa and packed up to come over. He arrived over a year later and when he tried to take private health insurance for himself and his wife, he was told he'd registered for Medicare more than a year ago and the extra loading on his premiums which applied for private health insurance are eye watering.

Nobody told him about the 12 months period of grace before taking out health insurance cover.

Worth thinking about.

 

This will explain it all in more detail.

 

https://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/lifetimehealthcover.htm

 

Edited August 1, 2018 by Bob

[March2]

@Bob  thank you so much for this insight.  We, a family of 4, will be relocating in December.  Hubby and I are both mid 40's already, so it is really great to know that we could save on something.  We have PR which takes care of Medicare and  am so grateful for you providing the "picture" of the money that we would otherwise unnecessarily end up spending.