The end of the financial year often sees Australians working out where they can cut their tax bill.
That often means being smart with your health insurance, as the right policy can actually save you money.
Anybody who has had a pay rise or is newly coupled up may find they benefit financially from even a basic form of hospital cover if they take out a policy before July 1.
How does buying health insurance save you money?
Anybody earning over $90,000 per year – or $180,000 as a couple – who doesn’t have an eligible hospital cover will need to pay the Medicare Levy Surcharge (MLS) when they file their tax return.
The surcharge can be as much 1.5 per cent of your taxable income.
The good news is even low-cost Basic hospital cover policies will be enough to help you avoid the MLS for the period you have the cover.
The bottom line: If you’re above the threshold, the sooner you get covered, the sooner you stop paying the surcharge.
Does my age have anything to do with health insurance at tax time?
Yes and no. There’s another advantage for Medicare card holders over 31 taking out hospital cover for the first time.
Once you turn 31, every year you don’t hold an eligible hospital policy means you’ll face an additional fee when you do decide to take our cover.
This fee increases by 2 per cent each year and is known as the Lifetime Health Cover loading.
The good news is, like the Medicare Levy Surcharge, taking out even a Basic hospital policy can help you avoid this loading fee at a later date.
It’s easy to compare policies with Health Insurance Comparison.
In just a few minutes you can research which cover fits you best from our panel of trusted insurers and then buy online.
So be smart when it comes to your finances and make sure you’re cutting your tax bill and future costs of cover by taking out a hospital policy before the end of the financial year.
This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.