Question 1

Why should I have private health insurance?

Accepted Answer

We get this question a lot. We’re extremely lucky in Australia to have a great public healthcare system. So why have private health insurance if the public system is so good?

There are plenty of reasons why people choose to have private health insurance. Here are some of the most common:

While you will receive treatment in the public system, there is no guarantee who your doctor will be or where your treatment will be. Having private health insurance gives you the flexibility to choose your doctor and hospital, providing your doctor has practicing rights at that hospital.

Avoid long waits - Elective surgery waiting times in the public system can be lengthy. According to the Australian Institute of Health and Welfare (AIHW) Elective surgery waiting times 2023–24 report, 50% of patients were admitted for elective surgery in public hospitals within 46 days in 2023–24, compared with 49 days in 2022–23. With private hospital cover, you may have more choice over when to have your surgery within the private system.
Source: Australian Institute of Health and Welfare (AIHW), Elective surgery waiting times 2023–24.

Cover for the things you value – looking after your health can be expensive. Depending on your level of Extras cover, you can claim for things like glasses, contact lenses, physio, chiro, prescriptions, vitamins, preventative health tests, dieticians, outpatient travel – and so much more. Waiting periods, item limits, sub-limits and annual limits do apply. Check our policy summaries for the full range of services covered and applicable waiting periods and limits.

Dental cover – Medicare generally doesn’t provide benefits for dental care, meaning that costs can quickly add up if you require treatment. Having Extras cover can help you reduce or avoid dental costs – for example, Westfund members with an Extras policy are completely covered for selected preventative dental services at any Westfund Provider of Choice dentist or Westfund Dental Care Centre, up to applicable limits (waiting periods may apply).

Tax time – depending on your taxable income, you may have to pay the Medicare Levy Surcharge if you don’t have an appropriate level of private hospital cover.

Question 2

Changes to the Medicare Benefits Schedule (MBS)

Accepted Answer

Changes to the Medicare Benefits Schedule came into effect on 1 July.

These changes were the result of a consultative process between the Federal Government and a clinician-led MBS Review Taskforce. As a result, more than 900 MBS item numbers have been changed - most related to general surgery, orthopaedic and cardiac services.

Updates to the MBS are aimed at increasing efficiency and transparency to consolidate the Schedule to reflect current medical procedures and practice.

We understand our members may be concerned about how these changes may impact your cover.

What are the changes?

The changes are the Government’s response to recommendations from the clinician-led MBS Review Taskforce, aimed at ensuring the Schedule reflects modern medical and clinical best practice.

Most of the changes relate to item numbers for Orthopaedic Surgery, Cardiac Services and General Surgery with the intent of combining like procedures, removing ambiguity and improving the quality of care and safety to patients.

The changes have introduced new items, amended existing items and (in a few cases) deleted some items.

While specific item numbers may have changed, you’ll remain covered for procedures and treatments falling under the clinical categories covered by your policy.

A relatively low amount of item numbers have been removed. If an item has been removed, it has (in most cases) been replaced or consolidated with another item.

If you’re still concerned, remember we’re here to help. Just call or email so our Member Care experts can talk you through your concerns.

Question 3

What is Lifetime Health Cover?

Accepted Answer

Lifetime Health Cover (LHC) was introduced to encourage younger people to take out hospital cover earlier in life and to maintain that coverLHC works by applying a financial penalty to those who choose to take out hospital cover after they turn 31 in the form of a two per cent loading for each year their age exceeds 30 when they do choose to join.

LHC applies to everyone who takes out hospital cover after July 1 following their 31st birthday (this day is sometimes referred to as your LHC base day).

For example, if you take out hospital cover at age 40 you will pay 20% more (2% for each year over the age of 30 x 10) than someone who first took out the same hospital cover at age 30.

Example scenario one:

Sally is 37 and has decided to take out a hospital policy with Westfund. Sally has not previously held private hospital cover. Her base premium is $1000 per annum. Sally must also pay a LHC loading of 14% (2% x 7 years), bringing her premium to $1140 per annum*.

If you’re on a couple or family policy, your loading is calculated as an average between the individual loading of the two adults. For example, if one person has 20% loading and the other person has 0% loading, the loading applied to the couples’ policy is 10%.

NOTE: Extras cover, Overseas Visitors Health Cover, and international forms of insurance are not considered to be hospital cover for Lifetime Health Cover purposes.

Example scenario two:

Bruce and Jennifer are 36 and 35 respectively and are taking out a family hospital policy with Westfund. Neither have previously held private hospital cover. Bruce’s LHC loading is 12% (2% x 6 years) and Jennifer’s is 10% (2% x 5 years) meaning a combined total of 22%. This loading will be halved, bringing their collective LHC loading to 11%. Their base premium is $5000 per annum; with LHC loading applied, their premium then becomes $5550 per annum*.

*Costs are for illustrative purposes only and do not reflect the pricing of any specific Westfund Health Insurance product.

Question 4

What is the Australian Government Rebate on private health insurance?

Accepted Answer

The Australian Government Rebate on private health insurance is a way to help offset the cost of private health insurance premiums for policyholders. The rebate is income tested and applies to hospital, extras and ambulance policies.

It’s recognition by the government that consumers who invest in private health insurance are taking responsibility for their own healthcare needs, while also contributing significantly to the Australian healthcare system.

It also recognises the fact that private healthcare users take pressure off the public system, especially with respect to public hospitals.

The rebate is income tested. Depending on income thresholds, you may be entitled to a reduced rebate. Different thresholds apply depending on whether you have a single income or a family income. Your entitlement is also based on the age of the oldest person covered by the policy.

The income thresholds and rates applicable for the period of 1 July 2026 to 30 June 2027* are:

	Base Tier	Tier 1	Tier 2	Tier 3
Singles	$105,000 or less	$105,001 - $123,000	$123,001 - $164,000	$164,001 or more
Families	$210,000 or less	$210,001 - $246,000	$246,001 - $328,000	$328,001 or more
Medicare Levy Surcharge	0%	1%	1.25%	1.5%

The income thresholds and rates applicable for the period of 1 July 2025 to 30 June 2026* are:

	Base Tier	Tier 1	Tier 2	Tier 3
Singles	$101,000 or less	$101,001 - $118,000	$118,001 - $158,000	$158,001 or more
Families	$202,000 or less	$202,001 - $236,000	$236,001 - $316,000	$316,001 or more
Medicare Levy Surcharge	0%	1%	1.25%	1.5%

The income thresholds and rates applicable for the period of 1 July 2024 to 30 June 2025* are:

	Base Tier	Tier 1	Tier 2	Tier 3
Singles	$97,000 or less	$97,001 – $113,000	$113,001 – $151,000	$151,001 or more
Families	$194,000 or less	$194,001 – $226,000	$226,001 – $302,000	$302,001 or more
Medicare Levy Surcharge	0%	1%	1.25%	1.5%

*Information sourced from www.ato.gov.au

Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

Question 5

What is the Medicare Levy Surcharge?

Accepted Answer

What is the Medicare Levy Surcharge?

The Medicare Levy Surcharge (MLS) is a levy paid by Australian taxpayers who don’t have an appropriate level of private hospital cover and who earn above a certain annual income. It’s in addition to the compulsory Medicare Levy of two per cent, which is paid by most Australian taxpayers to help fund Medicare.

The surcharge aims to encourage individuals and their families in higher income brackets to take out private hospital cover and where possible to use the private system to reduce the demand on the public system.

The surcharge is calculated at the rate of 1% to 1.5% of your income (or the income for you and your partner) each financial year.

The income thresholds and rates applicable for the period of 1 July 2026 to 30 June 2027* are:

	Base Tier	Tier 1	Tier 2	Tier 3
Singles	$105,000 or less	$105,001 - $123,000	$123,001 - $164,000	$164,001 or more
Families	$210,000 or less	$210,001 - $246,000	$246,001 - $328,000	$328,001 or more
Medicare Levy Surcharge	0%	1%	1.25%	1.5%

The income thresholds and rates applicable for the period of 1 July 2025 to 30 June 2026* are:

	Base Tier	Tier 1	Tier 2	Tier 3
Singles	$101,000 or less	$101,001 - $118,000	$118,001 - $158,000	$158,001 or more
Families	$202,000 or less	$202,001 - $236,000	$236,001 - $316,000	$316,001 or more
Medicare Levy Surcharge	0%	1%	1.25%	1.5%

The income thresholds and rates applicable for the period of 1 July 2024 to 30 June 2025* are:

	Base Tier	Tier 1	Tier 2	Tier 3
Singles	$97,000 or less	$97,001 – $113,000	$113,001 – $151,000	$151,001 or more
Families	$194,000 or less	$194,001 – $226,000	$226,001 – $302,000	$302,001 or more
Medicare Levy Surcharge	0%	1%	1.25%	1.5%

*Information sourced from www.ato.gov.au

Single parents and couples (including de facto couples) are subject to family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

Do I need to pay the Medicare Levy Surcharge?

You may need to pay the Medicare Levy Surcharge if you are:

a single person with an annual taxable income for MLS purposes greater than $105,000; or
a family or couple with a combined taxable income for MLS purposes greater than $210,000. The family income threshold increases by $1,500 for each dependant child after the first; and
do not have an appropriate level of hospital cover with a registered health insurer.

If you’re a family with a combined income of more than $210,000 in the current financial year, you must hold hospital cover for you, your partner, and your dependants to avoid the surcharge. If your partner or one of your dependants is not covered, you may have to pay the surcharge.

For more information about dependants and income for the purposes of the Medicare Levy Surcharge, visit the Australian Taxation Office.

Question 6

What are Aged Based Discounts?

Accepted Answer

Age-Based Discounts are exactly that – a discount on hospital premiums of two per cent for each year that a person is aged under 30 when they first purchase eligible hospital cover. Age-Based Discounts were introduced as part of the federal government’s 2019 reform of private health insurance to make private hospital cover affordable for younger people and as an incentive to take out a policy. The maximum discount a person is entitled to is ten per cent. It’s voluntary for private health insurers to implement Age-Based Discounts.

Age-Based Discounts are available for both new and existing Westfund members. You’re entitled to the discount based on the age you were at the time Westfund implemented the Age-Based Discount (1 July 2019) or from when you first take out an eligible hospital cover. This date is also known as your discount assessment date.

Your age when you take out hospital cover	Percentage discount
18-25	10%
26	8%
27	6%
28	4%
29	2%
30	0%

Example one

Jill took out private hospital cover with Westfund at 25, and was 28 when Westfund implemented the Age-Based Discounts (1 July 2019). She is entitled to the four per cent discount for a 28-year-old, as this was her age at the time the discount was implemented.

My partner and I are both entitled to an Age-Based Discount. What will our discount percentage be?

If you’re both entitled to a discount, the total discount percentage is an average of the two, similar to the way Lifetime Health Cover loading is calculated.

Example two

Lee and Jamie, both 27, are joining Westfund on a family hospital cover. As 27-year-olds, they are entitled to an Age-Based Discount of six per cent, however this does not mean the discounts are combined for a total discount of 12 per cent. The total discount percentage will be an average of the two, which in this case is six per cent.

The Age-Based Discount applies until you turn 41 and will start to phase out after this point. The discount will reduce by two percent each year until no discount is applicable.

The removal of the discount once you turn 41:

If, for that period, the person is aged:	The person’s percentage for the period is:
18 or older, but under 41	The person’s base percentage
41	The persons’ base percentage minus two percentage points
42	The person’s base percentage minus four percentage points
43	The person’s base percentage minus six percentage points
44	The person’s base percentage minus eight percentage points
45 or older	Zero

Understanding private health insurance

Why have private health insurance

Terminology