Private Health Insurance Rebate Basics
Choosing a private health insurance plan can be complex and there are many things to consider. For most people, the major consideration may be cost, which means that understanding exactly how much you’ll pay for coverage is extremely important. When looking at premiums and deciding on a policy, you need to know what money saving ideas you can put into action so you truly understand what you’ll be paying.
Luckily, there are many ways to lower private health insurance costs, and one of the simplest is the Private Health Insurance Rebate.
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Private Health Insurance Rebate Basics
In 1999, the government introduced the Private Health Insurance Rebate (also known as the Federal Government 30% Rebate). With this rebate, for every dollar you pay for your private health insurance premium, the government will give you back at least 30% as a rebate. The rebate increases as you get older. People age 65 to 69 may receive a 35% rebate and people age 70 and over may receive a 40% rebate.
The rebate is not based on income, so anyone who pays private health fund premiums for a complying health insurance policy to a registered health fund can receive the rebate. If you pay the cost of the premiums and are the policyholder, you are eligible, even if the policy doesn’t cover you. For example, if you have a policy for your children, you can receive the rebate. If your employer pays your premium on your behalf, you are still eligible for the rebate.
How to Claim the Rebate
Claiming the Federal Government 30% Rebate is simple and straightforward. No matter how you pay your premiums —monthly or yearly, in instalments or in advance— there are 3 ways to claim this rebate.
1. Premium Reduction
You can reduce the upfront cost of your premium by asking your fund to provide the rebate as a premium reduction. This is helpful for those on a tight budget who need to keep costs low and level. To claim the rebate in this way, you’ll need to register with your health fund to do so.
2. Cash Payment
You can also claim the Federal Government 30% Rebate as a cash payment from the government when you have paid the full, upfront cost. You can do this at your local Medicare office or by lodging the claim form by post. The claim form is available at Medicare offices and on the Medicare website. You will also need to attach a special receipt from your registered health fund.
3. Tax Return
You can also choose to claim your 30% Rebate on your annual income tax return if you have paid the full, upfront cost. You will receive a statement from your health fund at the end of the financial year to assist you in completing your tax return.
What It All Means
Obviously, a rebate of any kind is helpful, and a rebate of 30% or more can be a great benefit when it comes to paying for your health insurance policy. The Private Health Insurance Rebate is definitely something to bear in mind as you compare health insurance and consider how much you can spend. For example, let’s say you are looking at a policy with a premium of $300 a month. If you claim the rebate as a premium reduction, you will only pay $210 a month. That’s a substantial saving.
The Private Health Insurance Rebate is a help to Australians who want private health insurance but don’t want to spend an outrageous amount to get it. Whether you are just beginning your search for a policy or have had one for a while, make sure you understand and take advantage of this helpful and important rebate.
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