Pay Health Insurance Early to Save $1,000

Consumer watchdog Choice said families can save as much as $1,000 by paying the premium upfront before July this year. The strategy can also help families beat the new means test for rebates on private health insurance.

Choice tracked how families perceive private health insurance. The group said most families remain confused by the new changes.

It added that it would benefit high-income families if they stick to basic hospital coverage. Choice spokeswoman Ingrid Just said high-income families should not dump their private hospital coverage because they are likely to be affected by higher Medical Levy Surcharge.

Just also said high-income earners can save money by pre-paying their annual premiums by June 30, 2012. This would lead to benefitting from the current rebate and avoiding the means test for the next 12 months.

The new progressive means test will affect families that are earning more than $166,000 and individuals that are earning more than $83,000. It also removes the 30 percent rebate for single citizens who earn an annual $129,000 and families with $258,000 annual income.

Health funds, however, are quick to say that they cannot officially say this to their customers because they cannot be perceived as giving tax or financial advice.

Health Minister Tanya Pilbersek also said that paying the premiums beforehand is just for the first year of implementation only.

Choice is a consumer watchdog group established in 1960. It aims to provide independent and transparent reviews and empower consumers to get the best value from their purchases.

Tagged Choice, Ingrid Just, Medical Levy Surcharge