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Health Insurance: What An Expat in Australia Needs to Know

Jonathan October 24th, 2010 0 comments

Thanks to excellent weather and fantastic healthcare facilities, it’s no wonder that Australia exerts as much attraction for overseas professionals as Western Europe and the United States do.

One of the primary concerns for foreigners working in Australia is obtaining health insurance. Most of the time, the company you work for will take care of it, but other times, the mantle of responsibility falls on the individual’s shoulders, especially if he or she is an entrepreneur. Aside from comparing quotes and plans from different health insurers, or health funds, there are a few aspects an expat has to consider about his or her health insurance.

Is Medicare Enough?

Workers who stay for more than a few months in Australia are eligible to apply for Medicare, the country’s own healthcare system that coexists with the private healthcare. It is funded by up to 1.5% of taxpayers’ income, depending on the income tier the individual falls under.

Under Medicare, the majority of patients enjoy 100% cover of in-patient care and about 75% primary care charges at a public hospital. However, should a person choose to be admitted to a private hospital, Medicare will only cover the costs equivalent to that of a public facility, and the patient has to make up the shortfall. Additionally, there may be an age limit for Medicare applicants, which leads to private health funds being another avenue of assistance to which expats can turn.

“Topping Up” with Private Health Insurance

Aside from covering hospitalisation fees only up to that incurred in a public hospital (if admission is sought in a private facility), Medicare does not provide coverage for dental and optical care, as well as ambulance transport. These expenses may be mitigated with the use of a Low Income Earner Card, but most expats would be ineligible for this.

A private health insurance policy would provide more comprehensive health management plans, and can be tailored to meet an individual’s needs more closely. As a financial incentive, all taxpayers stand to gain up to 25% rebate if they have private health cover. The rebate can be a tax rebate or insurance premium discount. Individuals may also collect a refund from Medicare offices. As with Australian citizens, expats aged 65-69 and over 70 years stand to enjoy rebates of 30% and 34% respectively.

Putting Yourself First

A further incentive for expats to purchase private health cover is the Australian government’s imposition of a higher Medicare Levy Surcharge for high income earners who do not already have private health insurance.

The definition of “high income” is based on a threshold amount and can be subject to revision. Rather than pay for health benefits for other people, most, if not all, income-earners would prefer to spend more money on themselves.

Choosing A Health Fund

While the rebate is an attractive incentive to purchase private health cover, an expat buying his or her own insurance should be aware that the health fund must be registered inside the federal scheme in order for it to qualify for tax rebates.

The expat should also determine the extent a health fund will cover healthcare fees. While most private funds may cover the costs that Medicare doesn’t meet, some will pay the Medicare rate if a policyholder is admitted to a private hospital. Having to pay out-of-pocket in this manner thus defeats the purpose of buying health insurance in the first place.

Dealing with Brokers

Insurance brokers can be consulted if an expat desires full/comprehensive private cover outside of Medicare. Whether you’re ineligible for Medicare or just want full cover anyway, you need to know what you can afford and what you consider necessary benefits.

This means having full comprehension of what is and isn’t covered by the policy, in addition to aspects of the cover that you simply don’t require, such as obstetrics if you’re a single male with no plans on settling down. Helpful features to look out for include rapid settlement of claims, e.g. in 14 days, a multilingual helpline accessible 24/7 and whether cover for accidents and injuries are included in the policy.

A broker can represent more than one health fund as well, so it’s easier to find a policy that best suits you from one who has a wide network.

As with other rapidly-expanding economies, the Australian government is supportive of the influx of skilled workers to sustain trade. This, combined with the need for private health cover and a large number of health funds that keep premiums affordable, means purchasing private health insurance is an attractive prospect for the expatriate worker.

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