With money often being tight for single parents, you might well wonder whether you can afford to take out health insurance. While you can save some money in the short term by not having private health insurance, do you have the financial means to deal with the costs if you or your children have an accident or fall ill? If the answer is no, you definitely need to start thinking about taking out health insurance to protect your family.
Finding the Right Policy
Health funds previously regarded all families in much the same way, and would charge the same premiums for both one and two-parent families. Since 2007, single parents have been able to pay premiums that are more appropriate to their situation, and pick and choose the options that suit their family best.
Make sure that you’re getting the most cost-effective health cover for your money by comparing different health funds. Using a comparison website can save a lot of time and effort in this respect as you can find policies that suit your single parent situation at a glance without having to look at every health fund to see if they provide adequate coverage options.
The Medical Levy Surcharge
All Australian taxpayers are subject to a 2 per cent Medicare levy, but if you earned less than $180,000 for the 2015-16 financial year, you won’t be hit with the additional Medical Surcharge Levy (MLS) on top of this. This threshold is the same for both one-parent and two-parent families.
If you’ve got more than one child, the situation is a bit more complicated as the thresholds at which you have to pay MLS change at a rate of $1500 per child.
For single parents who don’t earn enough to pay the MLS, you’re not obliged to take out hospital cover to avoid it. It’s advisable to have this in place for peace of mind, but if you’d prefer, you can choose to concentrate on arranging cover for the add-ons that you feel are most appropriate for you and your family. This can include extras such as dental and optical costs.
If your earnings do exceed the threshold, you can avoid paying the MLS by taking out hospital cover with a registered health fund, but you may still choose to supplement this with optional extras that suit your family’s needs.
Saving Money on Premiums
As a single parent, you can often get cheaper health insurance premiums if you choose a policy that doesn’t include services that aren’t relevant to your current situation, such as pregnancy cover or IVF-related treatments if having more children isn’t in your plans at the moment. You can always look into upgrading your coverage levels to add these type of extras to your policy if your needs change further down the line but in the short term, dropping any extras that you don’t need right now can be a great way to save money on your health insurance premiums.
For most single parents, being hit with unexpected bills would be financially crippling. While private health insurance might seem like an unnecessary luxury, it should be a key priority for protecting your family in the long term.
Health funds have become much more respectful of the need for single parents to be able to pick only what is applicable for their situation, so it’s now much easier to make sure that you pick a policy that best suits your family and aren’t swayed into paying higher premiums for add-ons that won’t be used.