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Penalising late comers to private health insurance


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#1 Rachaelxxx

Posted 24 January 2013 - 09:42 AM

I've had private health insurance for years, purely for obstetrics reasons and this year I'm entering the work force full time and for the first time we can actually afford private health insurance for the whole family.

Some may argue that this should have been a priority, but to date we've been lucky not to have really needed private insurance for the girls and my husband.  My husband is 41 and will be penalised 11% for joining (2% premium for every year over 30).

I don't understand that logic, I think it's a bonus anytime anyone comes on board with private health insurance.  If anything I thought they would have been offering incentives for late comers and I know the government bought this legislation in, not private health insurance companies, but it doesn't make a lot of sense to me.

#2 PrincessPeach

Posted 24 January 2013 - 09:48 AM

I think it may have something to do with the social thought process of older people = more health complaints.

Also I've come accross a number of people who are joining private health simply to have an operation or something done in the private secotr, becasue it's actually quicker from them to serve out the waiting periods then to wait in the public system.

Or they are joining to avoid paying medicare surcharge.

Edited by PrincessPeach, 24 January 2013 - 09:50 AM.


#3 ellebelle

Posted 24 January 2013 - 09:51 AM

Very few of us claim for the hospital component before we are 40. There was an article recently, stats which I don't remember exactly, but something along the lines of claims being very skewed to those over 65. Basically, the govt has worked out a cut off where it is felt that we are contributing long enough to keep the system viable, and the line in the sand is 30. I'm in my early forties and except for obstretics have had no need for the cover either to date. It's not a "bonus" that others come later and then start claiming sooner - it's a drain.

#4 rosiebird

Posted 24 January 2013 - 09:51 AM

It's quite simple economics. Your husband saved money by avoiding paying PHI while he was young and statistically less likely to need it. Now he is older and more of a liability to the PHI company, they need to recoup the costs.

#5 sandgropergirl

Posted 24 January 2013 - 09:52 AM

Pretty straight forward. If you had health insurance for the years and not used it you have earned the insurer money. You now want to enter at a time when it's likely you will cost more than you pay. Same as insurance for young drivers costing more than experienced ones. Young people have mre bungles. Older people cost more in th health system

#6 Lolpigs

Posted 24 January 2013 - 09:54 AM

It was done by Howard to force people out of the public system under the guise of doing something positive.

This was instead of putting more money into public hospitals.

There isn't much other reasoning behind it. Obstetrics is a joke because of the massive out of pockets that you have, which means you are financially better off using the public system.

#7 bebe12

Posted 24 January 2013 - 10:02 AM

Hi,

I wish you could get out of it if you could prove that you could not have afforded it before you join.

Ie before i remarried i was working parttime and studying and getting not even a $1 a day from exh for DD. During those 2 years of 31-32 i could not afford it, but now am stuck with surcharge, as apposed to people earning fulltime wage.

I am now on Maternity leave and for last 5 years have paid PHI, as i believe it is good for our family, but some individuals aren't earning enough to fork out cover for something they will likely not use. especially single parents.

#8 YodaTheWrinkledOne

Posted 24 January 2013 - 10:05 AM

QUOTE (ellebelle @ 24/01/2013, 09:51 AM) <{POST_SNAPBACK}>
Very few of us claim for the hospital component before we are 40. There was an article recently, stats which I don't remember exactly, but something along the lines of claims being very skewed to those over 65. Basically, the govt has worked out a cut off where it is felt that we are contributing long enough to keep the system viable, and the line in the sand is 30. I'm in my early forties and except for obstretics have had no need for the cover either to date. It's not a "bonus" that others come later and then start claiming sooner - it's a drain.

this

QUOTE
It's quite simple economics. Your husband saved money by avoiding paying PHI while he was young and statistically less likely to need it. Now he is older and more of a liability to the PHI company, they need to recoup the costs.


and pretty much this.  And people were given HEAPS of warning that they would be penalised if they didn't have private hospital cover by the time they are 30.  So it shouldn't come as a surprise.  Choose not to have private hospital cover after the age of 30, then you are choosing to penalised if you decide to sign up when you are older and are just going to cost the insurer a lot of money.

DH & I signed up at 30 - cheapest policy we could lay our hands on.  We did it to avoid being hit with a surcharge later in life.  Signing up when you are in your mid-50's whacks a big penalty on to the premium.

#9 Percoriel

Posted 24 January 2013 - 10:08 AM

It sucks for people like us who have been out of Australia for most of our 30's and now into our 40's. We'll be penalised for not being in Australia. Which sucks really.

#10 wannabe30

Posted 24 January 2013 - 10:14 AM

QUOTE (Percoriel @ 24/01/2013, 11:08 AM) <{POST_SNAPBACK}>
It sucks for people like us who have been out of Australia for most of our 30's and now into our 40's. We'll be penalised for not being in Australia. Which sucks really.

I notified my health fund before we left, maintained insurance in my country of residence while I was out of Australia, and then rejoined my Aussie fund when I returned. They treated it as though I had never left.

#11 Rachaelxxx

Posted 24 January 2013 - 10:16 AM

I guess that makes sense, but the reality is we honestly could not have afforded private health insurance for the whole family in our 30's and it wasn't a surprise, I knew the legislation, but it certainly is making it harder and harder for the average Australian to afford private health insurance.

Edited by Rachaelxxx, 24 January 2013 - 10:18 AM.


#12 Rachaelxxx

Posted 24 January 2013 - 10:17 AM

Double post, sorry

Edited by Rachaelxxx, 24 January 2013 - 10:18 AM.


#13 sandgropergirl

Posted 24 January 2013 - 10:19 AM

QUOTE (economist99 @ 24/01/2013, 11:17 AM) <{POST_SNAPBACK}>
It's very fair. over 85 yo's soak up over 85% of the budget. If you dont believe this you haven;t been in a hospital lately, or checked out the heavily PBS subsidised medicine cabinet of an over 60yo. Govt provided statins, blood press, etc etc even viagra - many of which are on the HCC cost of $5 - some even onsell online for the real price of $80-800 for basic meds.

We have an unsustainable health care system and the reality is we have to work out how to provide for the future...and we cannot keep on being so generous.


Exactly

#14 choccy2

Posted 24 January 2013 - 10:22 AM

In the past I had PHI for all of us which I organised well prior to 30.

This was held for many years. At one point we went through some financial hardship and had to put it on hold with the intention of resuming it as soon as possible.

But then once the ex left  I struggled to find work (after supporting the ex's own business dreams) I could not afford to rejoin it  and the children and I had no insurance.

When it comes to choosing between literally feeding and educating your children and PHI - the 'choice' part is hardly a choice.

When I found work I was keen to rejoin, but by then was well passed 30 and had been out too long to avoid the penalty for joining again and that on top of it being an expensive product anyway, I'm resigned to not being able to afford it.

As the ex earns well over the threshold he ended up joining as it would cost if more in tax not to have it and decided recently to add the girls so at least they do have it .

Edited by choccy2, 24 January 2013 - 10:53 AM.


#15 Allie_D

Posted 24 January 2013 - 10:27 AM

My parents had me covered on their private health insurance up until I was 21 then DH and I took out our own cover at 24 and have had it ever since then.  To me it seems totally fair that your DH should be penalised for joining at an older age.  We haven't really needed to use our PHI for anything up until now starting IVF so we've been paying those premiums for years without needing it.

#16 opethmum

Posted 24 January 2013 - 10:29 AM

I am not sure what you're trying to get at but you have no sympathy from me whatsoever, you're getting older, the likelihood of your family needing more services increases with age and it is right that you are being charged extra.
So just suck it up and pay up and make that a lesson learned and make sure that your kids get their insurance at the right time.


#17 (feral)epg

Posted 24 January 2013 - 10:30 AM

It's not so much a penalty for your husband as a reward for you for joining earlier.


#18 *LucyE*

Posted 24 January 2013 - 10:30 AM

QUOTE
It was done by Howard to force people out of the public system under the guise of doing something positive.

rolleyes.gif  No one is forced out of the public system in Australia.  Even if you have PHI, you can still be treated without cost in the public system.  This is unlike the USA health system, which so many people flippantly liken our system to.

QUOTE
It's quite simple economics. Your husband saved money by avoiding paying PHI while he was young and statistically less likely to need it. Now he is older and more of a liability to the PHI company, they need to recoup the costs.

This.

As for being penalized for going overseas, you can come to an arrangement with your PHI before you leave, so you don't get affected by the age surcharge.

#19 Rachaelxxx

Posted 24 January 2013 - 10:33 AM

opethmum you are a very rude person.  It was a genuine question and I take on board the education of the replies, sympathy was not something I was after.  I wonder if you talk to people in real life like that, I wouldn't imagine you would have many friends.

#20 elizabethany

Posted 24 January 2013 - 10:39 AM

Don't think of it as a penalty, think of it as a reduced bonus, as that is what it really is.  It is a reduction in a govt bonus that pays some of your PHI.  Just think of what it was like before the govt paid a thrid of you PHI premium.  They are still paying 20% for your DH.

#21 Rachaelxxx

Posted 24 January 2013 - 10:42 AM

elizabethany that's very true, he has the surcharge for 10 years and then goes back to the same as mine.

#22 beastie

Posted 24 January 2013 - 10:43 AM

Dont talk to me about PHI. We are high income earners so pay substantial medicare levy plus each year plus around $6000 a year in PHI premiums.  Of course then you have out of pocket expenses each time  you claim and reduction in tax rebate for health expenses.  I think the system is unsustainable as well.

#23 cattivo lupo

Posted 24 January 2013 - 10:45 AM

The rules aren't a secret, you knew what would happen, so you have to suck it up I guess.  You saved a bundle not having private cover for him, and as people have said, as you get older you need more medical stuff.  Seems pretty fair.



#24 opethmum

Posted 24 January 2013 - 10:49 AM

QUOTE (Rachaelxxx @ 24/01/2013, 11:33 AM) <{POST_SNAPBACK}>
opethmum you are a very rude person.  It was a genuine question and I take on board the education of the replies, sympathy was not something I was after.  I wonder if you talk to people in real life like that, I wouldn't imagine you would have many friends.


wow sad.gif

#25 YodaTheWrinkledOne

Posted 24 January 2013 - 10:51 AM

QUOTE (Rachaelxxx @ 24/01/2013, 10:16 AM) <{POST_SNAPBACK}>
I guess that makes sense, but the reality is we honestly could not have afforded private health insurance for the whole family in our 30's and it wasn't a surprise, I knew the legislation, but it certainly is making it harder and harder for the average Australian to afford private health insurance.


I think it also depends on what you include as "private health insurance".  From the govt perspective, they just would like people to have private hospital insurance.  So, if you stick with the minimum - hospital cover with an excess and co-payment scheme, the premiums aren't too bad.  But if you choose to have no excess, no co-payment and choose to add on some ancillaries (physio, dental, optical, etc), then the premium sky rockets.  From a tax perspective, I think the govt is just looking to see who has private hospital coverage (no matter what payment arrangements you have to cover it) and the surcharge is applied to that.

While we are younger, we have chosen to have a high excess with co-payments for our hospital cover, because we really haven't needed to use it much.  It does save you some money to do that but the downside is that you need to be able to access a lump sum to pay the excess and/or co-payment if you choose to go into a private hospital for something.




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