The Barefoot Investor has advised a family to keep their private health insurance after they said they wanted to give it up because it cost $9,300 a year.
Fiona wrote to Scott Pape saying she was “wondering whether health insurance is necessary in Australia where we have good public healthcare”.
He added that his family of four pays $9,300 a year and wondered if it would be better for them to put that money in an investment account.
Barefoot Investor’s response began with a joke, saying that Fiona was “having a heart attack (get me to a public hospital quickly!).”
But she quickly changed to a serious tone and said the fact that she paid $9,300 a year indicated a few things.
The first was that she “must be a higher-income person, so she doesn’t receive any refunds,” she wrote in a column for news corporation.
His next comment was to say that “private health insurance is an absolute disgrace.”
“It’s incredibly complicated and increasingly unaffordable, which is why people are opting out of the system in droves,” he said.
The Barefoot Investor has advised a family to keep their private health insurance after they said they wanted to give it up because it cost $9,300 a year.
But that said, he didn’t suggest the family give up their private health insurance, because “as a higher-income person, the government is holding a gun to your head.”
“If you don’t have private health insurance, you’ll be hit with a penalty tax called the Medicare Levy Surcharge, which will cost you more than keeping quiet and just buying private health insurance.”
However, Pape told Fiona that her family is “paying too much.”
He said you should go to the website privatehealth.gov.au, which he says is “much better than slick sales sites like comparethemarket or iSelect”.
From there, the financial guru said you should go to the “Compare Policies” section and type in your policy identification number, found on your family’s policy statement.
Fiona wrote to Scott Pape saying she was “wondering whether health insurance is necessary in Australia where we have good public healthcare” (file image)
They should consider selecting a “hospital-only” cove, he said, since “most people don’t get much value from the additional coverage.”
If you’re not sure what benefits you get from your health fund, she said you should ask them for a benefit claim statement.
Your future family plans could also make a big difference, Pape said.
“If you no longer have children, you can downgrade from Gold to Silver or Bronze and save thousands – just check the exclusions.”
Then she and her family should compare what the privatehealth.gov.au website shows with their current policy, she said.
‘These are the exact steps I take each year when my premium is due. It only takes a few minutes, but it can save you thousands of dollars,” said Barefoot Investor.