There's a tax, a loading and peace of mind to think about. We explain each reason so you can choose if health
cover is right for you.
Right now, you're probably budgeting for important things like Netflix, house plants and Uber Eats.
And maybe health insurance? But it's probably not so high on your priority list.
Even while you're young and healthy, health cover is still a really important thing to consider. We
why, so you can make up your own mind about whether it's right for your needs.
1. Medicare is great but private health insurance has its advantages
Right now, you might be thinking, “but wait, isn’t going to a public hospital free?” Yes, it
That’s thanks to Medicare and the taxes you pay.
But while going public is free, going private has its advantages.
The real benefit of hospital insurance is you can go to a private hospital and choose your time of
treatment (instead of going on a public hospital waiting list and potentially waiting months or
for surgery—which is no fun if you’re injured or sick).
Hospital insurance also lets you choose your own doctor and gain access to a private room (if it’s covered
your hospital insurance product and available).
Then there’s extras insurance. It helps cover the cost of health services outside of the
like dental, glasses and physio. Medicare generally doesn’t cover those things so extras insurance is
2. Hospital insurance helps you avoid the Medicare Levy Surcharge
If you’re super successful, you might have to pay extra tax if you don’t have hospital insurance.
This tax is called the Medicare Levy Surcharge (MLS). It applies if you don’t have hospital insurance and
income for MLS purposes* is more than $90,000 as an individual or $180,000 as a family.
The MLS sits at 1 – 1.5 percent depending on your income.
The tax exists to encourage people who can afford it to take out hospital insurance, use private hospitals, and
reduce some of the pressure on the public system.
Avoiding the MLS is easy. Simply take out an appropriate level of hospital insurance. Just a heads up—if you only buy extras
insurance, the MLS will still apply.
If you do get hospital insurance to avoid the MLS, make sure you get a product that covers what you need. Some
products only cover the bare minimum, so you might find that, while it helps you avoid the MLS, if you try to
you might not be covered.
RELATED: Medicare Levy Surcharge FAQs
3. Getting hospital insurance earlier in life will save you money later
You’re probably vaguely aware of a turning 30 and health insurance thing.
It’s called Lifetime Health Cover loading, and it’s an extra cost added to the base price of hospital
insurance. Like the MLS, it’s designed to get you to buy hospital insurance.
If you’re 31 or older and you don’t have hospital insurance, you’ll get hit by
loading if you buy hospital insurance later in life.
When you do take it out, for every year you are over 30, you’ll pay an extra 2 percent for your
hospital insurance. The most you can pay in loading is 70 percent.
For example, if you’re 40 and taking out hospital insurance for the first time, you’ll pay 20 percent
more than a 30-year-old you.
Most people think you need to get hospital insurance before you turn 30 to avoid the loading, but you have more
than you think. The turning-30-thing is actually a turning-31-thing.
To avoid the loading, you need to buy
insurance on or before 1 July following your 31st birthday. This is the case for most people, but there are
RELATED: Lifetime Health Cover loading
And that’s all you need to know! If you’re interested in learning more about choosing a health
policy that suits your needs and budget, check out our helpful article: How to choose the best health insurance for young singles.