HCi Factsheet

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Why have private health insurance?

July 2022

Private health insurance can provide you with peace of mind that you have financial support through times of illness or injury.

If you’re wondering ‘why have health cover?’, here are some advantages to having private health insurance rather than just relying on the Medicare program.

Peace of mind

Protecting and ensuring the health of you and your family is very important. Private hospital insurance gives you financial peace of mind through knowing you have guarded against any large and unexpected hospital, medical and other health care bills.

In addition, extras cover can provide financial assistance for dental visits, glasses, physio sessions and much more – making it easier to access services to keep you healthy.

Avoid the Medicare Levy Surcharge (MLS)

For those on high incomes, private health insurance also helps you avoid paying an additional Medicare Levy Surcharge. As a high income earner without eligible hospital cover, you may have to pay up to 1.5% of your income as the MLS, depending on how much you earn.  This surcharge is on top of the normal Medicare Levy paid by all income earners through their tax.  For more information, you can refer to the ATO website or speak to your tax agent or financial advisor.

Medicare covers you for hospital and medical costs as a public patient in a public hospital. As such, you have no choice of doctor and will usually be treated in a shared ward. In many cases, especially for elective surgery, there may be a substantial waiting time for your treatment.

However, with HCi health cover, you know that if you or your family require hospital treatment, you will have greater control over who, where and when you are treated. In most cases, the waiting time for elective surgery will be significantly less than the public system. HCi provides access to over 500 private hospitals and day hospital facilities and more than 30,000 doctors.

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Other health care treatments

Medicare does not cover the cost of treatment for dental, optical, physiotherapy, chiropractic and many other non-medical type services. HCi offers you three levels of extras cover  designed to help offset the costs of these non-medical health services.

Lifetime Health Cover (LHC) loading

The Federal Government’s Lifetime Health Cover (LHC) initiative aims to encourage people to get private health insurance hospital cover while young. If you join early and continue private hospital cover, you will be rewarded with lower premium rates than those who take up cover later in life.

LHC is a financial loading payable on top of the base rate premium for your private health insurance hospital cover.

To avoid paying a LHC loading, you need to obtain hospital cover by 1 July following your 31st birthday. If you obtain hospital cover after that time, you may have to pay a LHC loading of 2% for each year you are over 30. For instance, if you wait until you are 40, you could be paying an extra 20% on the cost of your hospital cover. If you wait until you are 50, you could pay 40% more. And so on, up to a maximum of 70%.

HCi used its best endeavours to ensure this information was accurate at the time of publication. From time to time, circumstances relating to the subject matter may change which may impact the accuracy of the information. This information is also general in nature and does not take into account any specific health or financial situation. Before making any decisions in relation to this information, you should consider your own financial and health situation and seek professional advice. Health Care Insurance Ltd ABN 43 009 579 088. A Registered Private Health Insurer.

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