The Private Health Insurance Rebate: What You Need to Know
When it comes to my own health insurance, I want to get the most appropriate coverage possible for the lowest price possible. That may seem pretty straightforward, but finding a policy that fits that description can be difficult, and there are many things to consider when you compare health insurance.
One of the most important considerations is, of course, price. After all, most of us are on a budget and can’t just choose a plan without considering our finances. As you begin your private health insurance comparison, deciding what you need in your plan and comparing premiums, you need to know not only the basic premium but also what you will end up paying for your healthcare in total, including all expenses not covered by your health insurance.Image by Ben Hosking
Although the premiums offered for some private health insurances may seem high, you may be able to afford it if you understand some of the financial incentives there are for those who take out private health insurance. One of the greatest incentives is the Private Health Insurance Rebate, that could give you up to 34% discount on your health insurance premium.
What Is the Private Health Insurance Rebate?
The Private Health Insurance Rebate, introduced by the Australian government in 1999, is an incentive to help encourage people to take out private health insurance. With this rebate, the government will give you back up to 25% of what you pay for your private health insurance premium. The rebate increases as you get older. People aged 65 to 69 may receive up to 30% rebate, and people aged 70 and over may receive up to 34% rebate.
Who Can Get It?
The Private Health Insurance Rebate is available to many people. All those who are eligible for Medicare, and who have a Complying Health Insurance Product (CHIP) underwritten by a health insurer registered with the Private Health Insurance Administration Council (PHIAC), are eligible for the rebate. Most health insurance plans will qualify, but to make sure yours does, check out the list of insurers registered with PHIAC at www.privatehealth.gov.au.
The Private Health Insurance Rebate is not based on family type or income, and is available on hospital cover, general treatment cover or combined cover. You can receive the rebate even if your employer pays your premium on your behalf, and you can receive the rebate if you are the policyholder but the policy doesn’t cover you, such as parents who hold a policy for their children.
How to Get It
There are basically three ways to claim the Private Health Insurance Rebate:
- Receive the rebate as a premium reduction each month. For example, if your monthly premium is $1,000 a month and you take the rebate as a reduction, you will only pay $700 a month. To do this, simply ask your health fund.
- Receive the rebate as a direct payment from the government. You can do this when you have paid the full, upfront cost by simply filing a claim form which is available at local Medicare offices or online.
- You can also claim the rebate on your annual income tax return if you have paid the full, upfront cost. You will receive a statement from your health fund at the end of the financial year to assist you in completing your tax return.
What It Means To You
Although Australians are covered by Medicare, almost half choose to have private health care coverage as well. When looking for a policy, cost is a concern for most. Anything that helps reduce the premium is helpful, and the Private Health Insurance Rebate is one of the simplest and most common ways to save money on private health insurance.
For some families, the rebate may mean they can select a more extensive health insurance cover than they could have otherwise. For other families, the rebate may mean they can afford private health insurance rather than be limited to Medicare. Whatever the case, the Private Health Insurance Rebate means lower premiums for Australians taking out private health insurance.
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