To help relieve the strain on the public hospital system, the Australian Government put in place a rebate and two financial incentives to encourage people to buy hospital insurance and seek medical treatment at a private hospital.
Think of these as a ‘carrot and two sticks’: the carrot is the Australian Government rebate on private health insurance, and the two sticks are the Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) loading.
What is the Australian Government Rebate on private health insurance?
The rebate is a carrot – it’s a partial refund given to those who take out health insurance. It’s designed to help make health insurance more affordable.
Learn more about the Australian Government Rebate on Private Health Insurance
What is the Medicare Levy Surcharge?
The MLS is a stick – if you’re a high income earner and you don’t have hospital insurance, this is a tax you may need to pay when you lodge your tax return. It’s designed to encourage people to buy hospital insurance and seek medical treatment at a private hospital, therefore reducing the demand on the public hospital system.
Learn more about the Medicare Levy Surcharge (MLS)
What is Lifetime Health Cover Loading?
The LHC loading is the second stick – it’s an additional cost applied directly to a hospital insurance premium, which only affects people who haven’t taken out hospital insurance on or before the 1st of July following their 31st birthday. It’s designed to encourage people to buy hospital insurance earlier in life and stay covered.
Learn more about Lifetime Health Cover Loading (LHC)