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Tax year the ideal time for private health insurance savings

28 June 2011 - 1:00am

With the end of the financial year approaching, this is the ideal time for Aussies to be thinking about their private health insurance needs.

As well as the peace of mind offered by an appropriate health insurance policy, there is also a tax saving to be had.

With pressures growing on household budgets, Australians will be keen to take advantage of any opportunity to hold on to more of their hard-earned money.

Individuals and couples earning over the government threshold are required to pay an additional 1 per cent Medicare Surcharge Levy (MSL) if they don't have private health insurance. This is on top of the standard 1.5 per cent MSL.

"You pay if you have it - and you get a bit of the cost back - but don't have it and you often pay anyway," Sydney Morning Herald columnist Nicole Pedersen-McKinnon argued in a recent article making the case for private health cover.

"The case for holding private health insurance is compelling, never more so as we approach the end of a financial year."

As well as avoiding the additional 1.5 per cent MSL, Aussies who find themselves a suitable health insurance policy will also be eligible for a 30 per cent rebate from the federal government.

When choosing a health insurance policy, it's important to shop around to get the best deal and you may wish to get some advice from an independent broker.

As well as the appropriate type and level of cover, you will also want to strike a balance between the cost of your premiums and the required excess in the event of you having to make a claim.