Understanding the penalties for not having health cover
Costs and benefits of health insurance for young people go beyond financial concerns
You’re probably aware that you can be penalised for not having health insurance, but if you’re like 43 percent of Aussies, you don’t really understand how or why.*
The Lifetime Health Cover loading scheme (LHC) is an avoidable tax designed to encourage young people to take up private health cover by their 31st birthday, in theory keeping costs lower for everyone.
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People who do not take out private cover are hit with a 2 percent LHC loading on their premium for every year after age 30. The LHC can add as much as 70 percent to your premium, depending on when you do eventually take out health cover.
Before you rush out to purchase health cover or swear it off forever, it’s a good idea to do your research and become aware of market prices on health cover. Compare policies with HealthInsuranceComparison.com.au and you’ll be able to quickly and easily see which insurers can offer you the best deal.
There have been whispers of a possible reverse LHC, though whether or not this will happen is still up in the air. Industry body Private Healthcare Australia (PHA) has proposed to incentivize the LHC by offering a discount to people aged 18 to 30 who purchase health cover.
The suggested discount would go up by 2 percent each year to a maximum of 10 years. If it goes forward, the strategy could be implemented by the end of 2018.
In the meantime, young people should seriously consider the costs and benefits of having private health cover. Not only does it allow you to receive quick treatment for unexpected ailments, but there is real value in certain extras like optical and dental.
Keep in mind that health funds do cover a large proportion of mental health care and half of inpatient mental health treatment. Mental health care is a serious consideration for many young people; good treatment and support can vastly improve your quality of life.
Health cover may not be a necessity for everyone, and that’s why it’s important to be informed on your options. Once you receive your quote from HealthInsuranceComparison.com.au you’ll be able to get personalised advice from an advisor to make sure you’re getting the best value cover.
Not having health cover could cost more than you realise, but the good news is that finding affordable private health insurance is still within your reach.
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Step 1: Select your state below.
Step 2: Once you go through a few questions, you will have the opportunity to compare the quotes in your area for an average savings of 20% a month.