Spending Shakedown – Health

Updated 1 May 2021

Health care is a significant and growing part of household budgets and government spending and unfortunately, most of it probably isn’t discretionary. We’ve set out our suggestions to tighten spending below.

In summary, the key considerations are:

  • Will you keep your private health insurance, or not?
  • Ensuring you use any concessions and rebates you are entitled to
  • Minimising spend on medicines and supplements
  • Focusing on prevention rather than cure

Healthcare & Medical

The simplest method of minimising healthcare and medical expenses is to find a General Practitioner or healthcare professional that “bulk bills”. If they bulk bill they are accepting the Medicare benefit as full payment for the service and they bill Medicare rather than you. All you have to to do is sign the Medicare form or authorise the electronic Medicare transaction. Not all healthcare professionals bulk bill. You can search for one that does using this web site.

If your healthcare provider doesn’t bulk bill you will have to pay the bill and claim the Medicare benefit back. There are a number of ways you can claim the Medicare benefit. This web site explains the different methods. The bottom line is to make sure you claim the benefit!

Bulk billing is available for:

  • visits to General Practitioners and specialists
  • tests such as x-rays and pathology
  • eye tests performed by optometrists

Don’t wait until you’re sick to find a GP or healthcare provider.

Health Insurance

In the last few years, health insurance has become a hot and somewhat contentious topic. As the premium prices rise well above the cost of inflation and wage increases people have been dropping policies with only 44.2% of Australian covered at the middle of 2019.

We don’t advocate abandoning private health insurance. It’s a complex and tough decision to make. Essentially you need to consider the cost of the insurance premiums and the money you will save if you don’t pay them, the cost of health care when you or your family need it, the benefits payable under your private health insurance policy (this can be complicated to understand) and what services are available to you under the Medicare system. It’s a complex evaluation!

If you are planning to take up private health insurance you should do a thorough analysis of the policies available to you. If you already have private health insurance you should review it regularly and compare it to other policies that are available in the market. Like all insurance, don’t assume that you are being rewarded for your loyalty by your current provider.

There are a number of services available that can help you compare private health insurance policies. Be careful of commercial services that will generally only include insurance providers they have a commission, referral fee or advertising relationship with. Some commercial services also confuse the policies they promote with the ones that best suit your needs. We suggest you use the Australian Government provided Private Health Insurance web site.

We’ve also found the Member’s Own service helpful – they work for all the not for profit health insurers, and the staff are very well trained to go through policies, what you need, what the restrictions are, and whether extras are good value for you. Even just having a conversation with these guys can be very helpful.


The Lifetime Health Cover was initiated as a way of encouraging young Australians to take up private healthcare.

For people who haven’t taken out Private Hospital Cover by their 31st birthday, there is a 2% loading for every year you are aged over 30.

If you’re privately insured before June 30 of the year you turn 31 you will be on the lowest premium rate for life. If, for example, you wait until you’re 40 to take out private health insurance you’ll pay an extra 20% and if you wait until you’re 45 you’ll pay an extra 30%. The maximum loading is 70%.

This lifetime loading drops from your private health care premium after 10 years of holding private health insurance.


If you are single and earning above $90,000 or part of a couple who earns more than $180,000 you will be charged a Medicare Levy Surcharge if you do not have Private Health Insurance. The surcharge is 1.00%, 1.25% or 1.50% depending on your income. These are the rates for the 2020/2021 year sourced from the ATO website:

 Base TierTier OneTier TwoTier Three
Single Threshold$90,000 or less$90,001 to $105,000$105,001 to $140,000$140,001 or more
Family Threshold$180,000 or less180,001 to $210,000$210,001 to $280,000$280,001 or more
Medicare Levy Surcharge0.0%1.0%1.25%1.5%

The family income threshold is increased by $1,500 for each “Medicare Levy Surcharge dependent child” after the first child. You can find more information on the ATO website.

To avoid the Medicare Levy Surcharge your Private Health Insurance policy must provide Hospital Cover. A policy that provides Hospital Cover and Extras Cover will probably satisfy the requirements. A policy that only provides Extras Cover won’t.

Medicine & Supplements

Like many other products, medicine and supplements often have different prices at different places. So the best way to save money here is:

  • Find the cheapest retailer for medicines and supplements
  • Check catalogues for sales on supplements
  • See if you are eligible for any discounts

Based on our research, the cheapest retailer of Medicines and Supplements is Chemist Warehouse. Chemist Warehouse has a price matching policy and will give you a 10% discount on the competitor’s price. So even if they aren’t the cheapest they will be the cheapest!

Dental Health

Dental health can vary quite significantly. An example of this is a comprehensive oral exam, scale and clean, and a fluoride treatment varying from $150 to $320. The best way to find the most affordable treatment is to ring around and ask for a quote for the service you are after.

Dentist visits also vary even if you have private health care. Some useful research would be to find out what the gap payment will be for your level of extras cover. Some dentists have agreements with insurers that mean you will get no-gap preventative treatment 1-2 times per year. Other dentists may offer no-gap treatment themselves. Or you may be on a level of cover that provides a rebate worth 100% of the dentist’s cost.

It’s just as important for all other dental treatments to get a quote or multiple quotes and make sure you’re choosing the best option for you.

Specialist & Natural Therapies

If you have Extras through your Private Health Insurance you may be eligible for a rebate on some of the specialist and natural therapies you use. Things like acupuncture and remedial massage may be covered.

Concessions and rebates

There are a number of health care concession cards available to Australians. More information on these concession cards is available from the Department of Human Services. The concession cards include:

  • Commonwealth Seniors Card – this is available if you have reached pension age, you are resident in Australia or have a qualifying visa, you don’t get payments from Human Services or Veterans Affairs (if you get these you may qualify for another concession card) and you satisfy the income test
  • Ex-Carer Allowance (Child) Health Care Card – this is available if you are aged between 16 and 25, you are a full-time student, you are an Australian resident or have a qualifying visa and you had a Carer Allowance Health Care Card on the day before you turned 16
  • Foster Child Health Care Card – this is available if you are a foster carer
  • Health Care Card – this is available if you live in Australia, you get some payments or supplements from Human Services
  • Low Income Health Care Card – this is available if you are an Australian resident or hold a qualifying visa and satisfy the income test
  • Pensioner Concession Card – this is available if you receive an Age Pension or various other benefits
  • Veterans Health Cards – there are various cards available to Veterans that satisfy different conditions. More information is available from Veterans Affairs

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