Things you need to know about getting health insurance

As the end of the financial year approaches, you may be wondering: should I get health insurance? From protecting your health to saving money, there are many benefits to taking out private health insurance – particularly if you’re turning 31.

Our aim is for all Australians to live healthier, longer, better lives – and we believe health insurance is one small way to do this. So, if you’re on the fence about what to do and want to learn more, here are some factors you need to consider when deciding if getting health insurance is right for you.

Navigating health insurance can be confusing, but government changes¹ have streamlined and simplified how we label private health insurance. You’ll notice that policies are classified into four tiers: Gold, Silver, Bronze and Basic. Each tier covers a different number of clinical categories and hospital treatments, so it’s important to select the appropriate insurance to suit your circumstances.

If you need some help, fill out our handy questionnaire to determine the health insurance that best fits your needs.

Lifetime Health Cover (LHC) loading is an Australian Government initiative that aims to encourage people to get private health insurance earlier in life. 

LHC applies to those who don’t have hospital cover by 1 July following their 31st birthday. If you decide to get health insurance later in life, you’ll be charged an extra fee (called a loading) of 2 per cent to your hospital cover premium.

Most importantly, loading accumulates every year you are over 30 years old without insurance. For example, if you wait until 35 to get hospital cover, you’ll have a loading of 10 per cent. If you have a monthly hospital premium of $200, you’ll have to fork out $220 with loading combined. To avoid this surcharge, it’s advisable to get hospital cover before 1 July following your 31st birthday. 

People who are exempt from the LHC loading include new migrants who have registered for full Medicare benefits for less than 12 months, Department of Veterans' Affairs Gold Card holders and members of the Australian Defence Force and people born on or before 1 July 1934. 

The Medicare Levy Surcharge (MLS)² is an Australian Government initiative aiming to reduce the pressure on the public Medicare system. The programme aims to encourage people to get private patient hospital cover so they can use the private hospital system.

The MLS is levied (at a rate of 1 per cent, 1.25 per cent or 1.5 per cent) on taxable income. The base income threshold (under which you are not liable to pay the MLS) is currently $90,000 for singles and $180,000 (plus $1,500 for each dependent child after the first one) for families. With this in mind, it may be more affordable than you first thought to get private health insurance. 

To see the full conditions of the MLS, visit the Australian Taxation Office website.

We believe improving health doesn't have to be an all-or-nothing approach. It’s an All or Something approach that supports lasting changes. Every small choice you make to improve your health can lead to big changes in the long term. One benefit of private hospital insurance is staying in control of your health – it gives you the ability to choose your own doctor, have a private room and be treated in a private or public hospital. 

All AIA health policies come with access to AIA Vitality, which rewards you for making healthier decisions.

AIA Vitality is a personalised, science-backed health and wellbeing programme designed to support a healthier lifestyle. It provides tools, support and incentives that encourage positive behaviours, including moving more, eating well and completing regular health checks.

These activities earn you points, with rewards such as e-Gift cards, cashback on Virgin Airlines flights, gym membership discounts and much more.

¹ https://www.health.gov.au/news/reforms-to-private-health-insurance-have-started
² https://www.ato.gov.au/Individuals/Medicare-and-private-health-insurance/Medicare-levy-surcharge/

Staff writers come from a range of backgrounds including health, wellbeing, music, tech, culture and the arts. They spend their time researching the latest data and trends in the health market to deliver up-to-date information, helping everyday Australians live healthier lives. This is general information only and is not intended as medical, health, nutritional or other advice. You should obtain professional advice from a medical or health practitioner in relation to your own personal circumstances. The information in this article is general information only and is not intended as medical, health, nutritional or other advice. You should obtain professional advice from a medical or health practitioner in relation to your own personal circumstances

Disclaimer:
This is general information only and is not intended as financial, medical, health, nutritional or other advice. You should obtain professional advice from a financial adviser, or medical or health practitioner in relation to your own personal circumstances.