Tuesday, 20 March 2007

Medical Costs Outpace Inflation!

Yes, I know, that isn't news to anyone. But my annual notice from my health fund arrived today letting me know exactly how much my premium is rising this year. After announcing that they paid a record amount in claims last year (up 8.5%) they got down to the nitty gritty and let me know that my monthly premium for basic family hospital cover is going up to $151.45 per month (including the 30% Federal Government Rebate). This is only an increase of 2.0% from last years $148.40 a month. BUT, there's also a change in how the 'excess bonus feature' works. Instead of getting a $100 cash refund at the end of each year if you haven't made any claims, this is now being replaced by up to two excess free same-day or overnight admissions per year. Although the benefit seems similar, it's actually not much of a benefit to us as we've any made one claim in the past five years. Instead of getting $500 worth of refunds, under the new rules we'd have just saved $100 for one excess payment. Adding in the loss of the $100 refund each year, the actual "out of pocket" increase in premium is 8.1%.

If we didn't have private hospital cover we would have to pay a 1% medicare levy surcharge when our combined taxable income (with 2 dependants) iss above the $101,500 threshold for any year. We would probably have been under the threshold this year as DW spent a large part of the financial year on unpaid maternity leave, but most years our combined income would be over the threshold, so we'd end up paying at least $1000 in extra tax. The net cost of having the private hospital cover is therefore only around $68 a month, so it's probably still worth it in case any of us ever need 'elective' surgery - which is available in the public system, but can have very long waiting lists.

Enough Wealth

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