Friday 26 January 2007

Medical Expenses

I took a day of work last week to have a medical test done - a couple of hours of "day surgery" was involved. The bill for the procedure was around $500 for the specialist, with the medicare "scheduled fee" being $295.40 for this procedure. This would mean that without insurance I would have had to pay around 15% of the scheduled fee plus the difference between the scheduled fee and the actual amount invoiced. ie. around $250 plus an extra amount for the anaesthetist.

As it turned out my basic hospital insurance policy covered the entire amount, so it ended up costing nothing for this procedure (the test result also came back "normal" which was also a *good thing* ;). And how much does the insurance cost me? Well, the monthly fee charged to my CC is $148.40 (the amount is reduced by a federal government subsidy for private medical insurance) or $1780.80 pa for my family policy. However, the actual "out of pocket" cost is less than this as there is a medicare levy surcharge of an extra 1% of taxable income if an individual's taxable income is over $50K ($100K for a family). This tax year we wouldn't be liable for the surcharge as DW is on maternity leave an will have little taxable income, so our family income will be below the threshold. However, in most years our family income is high enough to be liable for the surcharge if we didn't have basic hospital cover, meaning that we'd be paying an extra $1250 in tax. So, the "real" cost of having the policy is only around $530 pa ($10 a week). Well worthwhile, especially if any of us ever need elective surgery in a private hospital, such as a hip replacement. (The waiting lists for elective surgery in public hospitals are very high to constrain costs, to private hospital insurance can be essential).

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