Save by prepaying premiums

Every year, private health insurance gets more expensive, and with a new means test to be introduced on 1 July 2012, for many people the cost of cover is going to rise even more. There is a way to reduce the pain of these price rises with savings of up to $1,000 if you prepay your premium.

It’s a loophole available to all Australians which means the current rebates will still apply if next year’s insurance cover is paid for by 30 June 2012.

After 1 July, individuals earning more than $83,000 and families on more than $166,000 will be subject to a new progressive means test that will phase out the 30 per cent rebate to zero for singles earning more than $129,000 a year and families above $258,000.

There may a temptation to drop private health insurance altogether but there’s also the chance that you may be hit with the higher Medicare Levy Surcharge that comes on top of the Medicare Levy that most people pay.

The pre-payment savings will be an option for the 2012-13 year only.

People who are considering pre-paying their health insurance premiums to take advantage of the potential savings should consult their tax adviser.

The new means test will add a new layer of rules for Australians and health insurance comparison websites such as are now making it easier for consumers to make informed choices about their level of cover.

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