To help relieve the strain on the public hospital system, the Australian Government put forward a rebate and two financial incentives. These initiatives encourage people to buy hospital insurance and go to private hospitals for treatment. Think of them as a ‘carrot and two sticks’.
What is the Australian Government Rebate on private health insurance?
The rebate is a carrot. It’s a partial refund given to people who take out health insurance. It’s designed to help make health insurance more affordable.
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 might pay when you lodge your tax return. It’s designed to encourage people to buy hospital insurance and go private instead of public.
Learn more about the Medicare Levy Surcharge (MLS)
What is Lifetime Health Cover Loading?
The LHC loading is the second stick. It’s an extra cost applied to a hospital premium, making it more expensive. It only applies to people 31 or older who buy hospital insurance after the loading deadline. It’s designed to encourage people to buy hospital insurance earlier in life and maintain that cover.
Learn more about Lifetime Health Cover Loading (LHC)
To find out more about how health insurance could affect you at tax time, head to the Private Health Insurance Ombudsman.