A new survey by Choice has revealed that many families and high income earners remain confused about the upcoming means testing of the private health insurance rebate.
According to the consumer group, it will cost less to take out basic hospital cover than to pay the government's Medicare Levy Surcharge (MLS) in most cases when means testing begins.
The Fairer Private Health Insurance Incentives Bill comes into effect on July 1 and will impact singles earning more than $83,000 per annum, as well as families earning over $166,000.
Not only will the private health insurance rebate be means tested, but the MLS is set to increase for the top two income brackets.
"If you're a higher income earner and things are getting tight, don't rush to dump your private hospital cover," Choice spokeswoman Ingrid Just told News Limited sources (April 22).
"If you do, you'll be hit with the higher Medicare Levy Surcharge that comes on top of the Medicare Levy most people pay."
Ms Just suggested that Australians may consider reducing or removing the extras component of their policy or pre-paying their premiums upfront before June 30.
For Australians looking to purchase a policy before July 1, a specialised health insurance consultant may be able to assist you in finding the most appropriate cover.