The choices in the big health insurance decision

With less than a month until the federal government's changes to the Medicare levy surcharge come into place, health insurance companies are doing everything they possibly can to recruit new members.

While some are offering free iPods and sports tickets, others are offering discounts on other financial products and even trips overseas.

Announced in treasurer Wayne Swan's first Budget earlier this year, the plan is to revamp the national health system and help out the finances of young workers.

The changes, which kick in on June 30th, mean that the old surcharge of one per cent of taxable income over $50,000 is doubled for singles to $100,000.

Someone earning $99,900 who before had two choices - either paying $900 for private insurance or a $999 Medicare levy surcharge - can now avoid both.

Designed to encourage more people to stay in the Medicare system, the scheme has had both its critics and its supporters.

AMP financial planner Tony Rigby told the Courier Mail: "I believe, probably, most Australians are going into private health insurance for the right reasons, not just to avoid paying a levy but because they want genuine quality private health cover.''

However, private health insurer Medibank has predicted it will lose between seven and ten per cent of its health insurance customer base.

Medibank chief financial officer Michael Sammells told a Senate committee most of the exodus would be people who are not high claimants or holders of more expensive products.

"Certainly, it would mean for us that the membership assumption that we had evidence in our rate change application, we are now expecting a different membership outcome over the course of the year," he said.

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