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Monday, April 23, 2012

Beat the Private Health Insurance Rebate Means Test

Many people probably do not realise but this coming July, the Federal Government is introducing means testing in the private health insurance rebate scheme. This means that some higher income earners will no longer get the 30% off their insurance premiums. The rebate will instead be determined by their individual or family income total and reduce as the incomes get higher.

CHOICE has recently come out and said that people can beat at least the first year's means test by prepaying their private health insurance.  I asked my health fund provider about whether a refund would be forwarded if I changed providers and they said that the pro-rata amount remaining on the fund would be refunded which makes it look like paying upfront could be worthwhile. I am still looking into this but wanted to throw it out there, what do you think about this idea?  Will it work? should people pay in advance closer to the July deadline?

1 comment:

  1. Inflation directly influences the rebate allowed on health insurance policies. With the reduction in rebates, a family may have to pay $28 extra on an average per financial year. The rebate on health insurance is considered to make a significant contribution to the federal health expenditure. However, it will presumably have a significant impact on the financial budget of the individuals from 2014, and thus has been a cause for concern for the consumers. The higher income earners will have to pay more for their health insurance coverage than what they had been paying this long, if they continue with the private health coverage plans.