Health Insurance For Expats In Australia

Contributed by Justin Grossbard, 13 March, 2014

46.9% of Australians have private health insurance based on research finalised on the 31st December 2012. This is a high level considering that all Australian permanent residents are entitled to Medicare which subsidises most doctors’ visits and public hospital stays and treatments.

The key reason for the high uptake of Private Health Insurance relates to six key factors.

1) Medicare Levy Surcharge

Those that work choose not to have private health insurance in Australia can be taxed at a higher rate, depending on their salary. From July 2013 – June 2014 the rate is 1% extra tax for salaries between $84,000 - $97,000. 1.25% for $97,001 to $130,000 and 1.5% for $130,0001+.

Based on this surcharge rate, it’s cheaper for many individuals to have private health insurance then pay the surcharge.  It should be noted that this surcharge is also applicable for overseas visitors working in Australia on visa’s such as the 457 visa.

2) Private Hospital Treatment

Medibank will cover some of the costs in an emergency but often this can involve delays in procedures and shared room accommodation. Private health cover can mean that if you do require a public hospital you will receive extra benefits such as a private room and additional treatment options. Most policies will also allow the individual to be treated in a private hospital which has improved facilities.

3) Waiting Lists

The public health system has waiting lists for ‘elective surgery’. Elective surgery can range from having your wisdoms removed to requiring a knee reconstruction. While an operation like a hip replacement may seem urgent, waiting lists can range from months to years. Private health insurance helps minimise any waiting for these procedures.

4) Ambulance Cover

Ambulance trips (even for an emergency) are not covered under Medicare.  This means that if you have a ride on an Ambulance it can cost hundreds or even thousands of dollars. Most health insurance options include this service for emergencies.

5) Extra’s Cover

Services such as optical, dental and physiotherapy have minimal coverage under Medicare. To reduce these costs for an individual they must have health insurance with ‘extras policy’. This will cover the costs of seeing a dentist to the costs of prescription glasses.

6) Lifetime Health Cover

Every year after the age of 30 that an individual does not have health insurance the cost of a policy increases. For example, if you take out hospital cover at age 40 you will pay 20% more than someone who first took out hospital cover at age 30. The maximum loading is 70%. This LHC calculator shows the loading. This penalty sees many individuals join health insurance at the age of 30.

 Expats Coming To Australia

Most working visas such as the 457 visa and 485 visa have ‘condition 8501’. This condition makes it compulsory to have proof of ‘adequate health insurance’ with your application and for the length of the visa. You can view a list of overseas visitor health insurance policies that meet this condition.

Those looking to study in Australia don’t need to meet ‘condition 8501’ but rather need to purchase specific student health cover called OSHC. This health cover is more basic then overseas visitor health insurance with lower policy costs as can be viewed by this OSHC policy table.

There are a list of Reciprocal Health Care Agreements countries from the UK to Italy. Each country has a different agreement in Australia but in most cases these citizens can access Medicare in Australia. For this to be the case, once they have arrived in Australia they must apply for a Medicare card. Once they have received this they meet ‘condition 8501’ and have the option to lapse their health insurance. Like Australian permanent residents though, many keep their health insurance due to the six reasons highlighted earlier.

Expatriates leaving Australia

Those leaving Australia are no longer within the scope of LHC rules when you leave Australia for at least one continuous year. Temporary returns to Australia up to 90 days per visit are disregarded. It’s important to inform your health insurance company when leaving Australia as they can place your policy on hold so you can resume it with no penalties when you arrive back in Australia. 

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