Dearest reader,

“Hit Back Before The Health Rate Rise Hits You” – iSelect

“Health cover premiums are set to change on 1 April 2018” – Medibank

If you’re like me, the April 1st private health insurance ads on tv can seem a bit alarmist.

“Get health insurance before April 1st otherwise the world will explode”

(ok, I made that one up).

But it’s true, ask a barber if you need a haircut and they’ll say… “yes”.

Ask a real estate agent when is the best time to sell and they’ll say… “now”.

Go to a health insurance website in Feb/March and you’ll likely get a similar answer.

So what is April 1st all about?

April 1st is the day health insurers push up their premiums (aka the cost to get covered) to meet the rising costs of healthcare.

The health insurer is required to send you a letter which tells you how much — in percent (%) — your private health costs will rise, BUT…

The actual dollar amount ($) can be more than that percentage.

Wah…?

That’s right.

Even though your letter might say: “policies are going up 4%”, the dollar amount you pay can increase by more than 4% because the Government is rebating less on some policies (e.g. singles who earn less than $140k).

Watch this video to get your head around some of the key insurance terms.

Understanding Insurance

Key Insurance Terms. Read more.

So what do I do?

It is confusing.

Surcharges on top of levies on top of confusing policies with gap payments and discounts — it’s no wonder people just throw their hands up in the air and buy a policy.

But here’s the important part:

You don’t have to get private health insurance if you don’t want it or need it.

Australia has an amazing public healthcare system.

(take it from me, I spent last week in The Alfred Hospital getting my appendix removed)

You: “But I’ll still pay for Medicare right?”

Almost every wage-earning Aussie pays the Medicare Levy (which is a 2% tax, according to the ATO).

That’s different to the Medicare Levy Surcharge which is an extra tax for singles who earn more than $90k and families/couples who earn more than $180k.

If you have the proper health insurance it’s the SURCHARGE that you avoid paying.

Put another way, if you earn a good wage but less than $90k (single) or $180k (couple/family) it makes no difference if you have private health cover or not — you still pay the 2% Medicare Levy.

Medicare Levy Vs. Medicare Levy Surcharge

Medicare Levy Vs. Medicare Levy Surcharge. Read more.

So don’t be April Fooled by the marketing in 2018.

If you’re on a good wicket and are worried about extra ‘Medicare taxes’, ask your accountant if it makes sense to get private health cover — before you sign up.

And take your time to read the Product Disclosure Statement (PDS).

An Important Rask Announcement

By now, many of you will know that the Rask network has grown to include Rask Mediaour financial news website.

It’s been a huge success so far — reaching an estimated 30,000 people in 2018 alone.

Check it out.

So what?

Rask is just getting started.

Going forward, I’ll be writing more regularly — hopefully once per week.

And we’re planning to include loads more features like podcasts, videos, news and analysis.

Cheers to your financial future!

Owen Raszkiewicz

 

P.S. I hope to have another (bigger) announcement to share with you in a few weeks. Stay tuned.

 

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