By Sam Walker

Unravelling the mystery of private health insurance is a daunting process but are you better off sticking with a flailing public health system or should you be taking steps to insure against possible medical misfortune?

There’s no clear cut answer but understanding some of the basics could help you make the decision that best suits your circumstances and budget.

With June 30 just around the corner, the first thing to consider is the Lifetime Health Cover Loading. Introduced in 2000 the loading penalises people by imposing an additional two per cent a year on health premiums if they haven’t taken out private hospital cover prior to their 31st birthday.

If you turn 31 by the end of June the loading will apply from July 1.

Most Australians must also pay the Medicare levy of 1.5 per cent of your taxable income.

The Medicare levy surcharge, designed to encourage people on higher incomes to take out private health insurance, is an additional one per cent. This extra charge applies to singles earning over $50,000 a year and couples earning more than $100,000, without private hospital cover. There are exceptions and for more information you can visit www.ato.gov.au.

Mark Jenkinson, director of Health Insurance Brokers says with about 40 private health funds offering about 4000 combinations of products it’s advisable to shop around to find the product that best suits your needs.

Not surprisingly he touts the services of brokers but the reality is if you are overwhelmed by the system they can save you time comparing the myriad of options available and can help you tailor a policy to suit your circumstances.

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