Private Health Insurance for Couples & Individuals
The Federal Government re-introduced three bills that would withdraw Health Care concessions for individuals and couples as their income rises.
Although previously rejected by Senate, the following reform package was resubmitted by the Government:
- Fairer Private Health Insurance Incentives Bill 2018 [No. 2]
- Fairer Private Health Insurance Incentives (Medicare Levy Surcharge – Fringe Benefits) Bill 2018 [No. 2]
- Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2018 [No. 2]
In a nut shell, these bills propose means-testing the Private Health Insurance Rebate and increasing the Medicare Levy Surcharge in July 2017.
PRIVATE HEALTH INSURANCE REBATE
At present, all Australians who are eligible for Medicare and who are members of a registered health insurer are entitled to rebates of 30%, 35% and 40% on their health insurance premium, dependent on their age:
|Age||Federal Government Rebate|
|65 to 69||35%|
|70 or older||40%|
Under the existing system, individuals would receive at least 30 cents back from every dollar contributed to their private health insurance premiums; a concession that makes quality health care accessible and affordable for all Australians â€“ no matter the type of cover, level of cover or income. The rebate may be deducted directly from your premium or simply make a claim in your tax return or in person at any Medicare office.
However, if the bills are passed, the entitlement decreases by 10% according to increase in annual income. The proposed thresholds are shown below:
Proposed Federal Government Rebate from July 2018
|Singles Income||Couples/Families Income||Up to 65 years||65 â€“ 69 years||Over 70 years|
|Up to $75K||Up to $150K||30%||35%||40%|
|$75K – $90K||$150K – $180K||20%||25%||30%|
|$90K – $120K||$180K – $240K||10%||15%||20%|
MEDICARE LEVY SURCHARGE
Australian taxpayers who do not have private hospital cover must pay a 1% surcharge on their taxable income. (This is in addition to the Medicare Levy of 1.5%)
If approved, the Federal Government propose the following changes to the existing income thresholds and increasing the level of surcharge as shown here:
|Singles Income||Couples/Families Income||Proposed
Medicare Levy Surcharge
|$75K – $90K||$150K – $180K||1%|
|$90K – $120K||$180K – $240K||1.25%|
|$120K +||$240K +||1.5 %|
Changes to the Private Health Insurance Rebate and MLS are yet to be approved and if approved, will not take effect until July 2018. More updates on the rebate and other news about the health care system coming soon.