Barefoot Investor Scott Pape’s candid advice for family over $9,300 dilemma: ‘You’re giving me a heart attack’
The Barefoot Investor has advised a family to hold on to 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 health care’.
She added that her family of four pays $9,300 a year and she wondered if they would be better off putting that money in an investment account.
The Barefoot Investor’s response started with a joke, saying that Fiona “gave me a heart attack (rush me to a public hospital!).”
But he quickly switched to a serious tone and said the fact she was paying $9,300 a year indicated a number of things.
The first was that she “need to be a higher income earner so you don’t get a discount,” he wrote in a column for News Corp.
His next point was to say that “private health insurance is an absolute disgrace.”
“It’s incredibly complicated and increasingly unaffordable, which is why people are opting for the system in droves,” he said.
The Barefoot Investor has advised a family to hold on to their private health insurance after they said they wanted to give it up because it cost $9,300 a year
But that said, he wasn’t suggesting the family give up their private health insurance because “as a higher income earner, the government has a gun pointed at your head.”
“If you don’t have private health insurance, you’ll be hit with a penalty called the Medicare Levy Surcharge, which will cost more than keeping your mouth shut and just getting private health insurance.”
However, Mr Pape told Fiona that her family is ‘paying way too much’.
He told her to go to the website privatehealth.gov.au, which he said is “so much better than the slick sales sites like Comparethemarket or iSelect”.
From there, the financial guru told her to go to the “Compare Policies” section and enter her policy ID number, which is found on the family’s policy statement.
Fiona wrote to Scott Pape saying she was ‘wondering if health insurance is necessary in Australia where we have good public health care’ (stock image)
They should consider choosing a “hospital-only” bay, he said, because “most people don’t get much value from extra coverage.”
If she’s not sure what benefits she’ll get from her health insurance fund, he said she should ask for a benefits statement.
Her future family plans can also make a big difference, Pape said.
‘Once you’ve finished having children you can downgrade from Gold to Silver or Bronze and save thousands of pounds – just look at the exclusions.’
She and her family should then compare what the privatehealth.gov.au website shows with their current policy, he said.
‘These are exactly the steps I take every year when my premium is due. It only takes a few minutes, but it could save you thousands of dollars,” said the Barefoot Investor.