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Getting $440 back from the tax man is good for your health

3 min read
5 Jun 2014

Under-31s* living in the Northern Territory and earning over $88,000 a year that don’t have private health insurance may as well throw $440 down the drain when they lodge their tax return.

Northern Territory residents that are under 31 years old and earn over $88,000 as an individual or $176,000 as a couple will be subject to the Medicare Level Surcharge (MLS), which starts at 1% and rises to 1.5% depending on taxable income levels.

All Australians earning above the MLS salary threshold ($88,000) that do not have private health insurance will pay a minimum MLS of $880 a year at tax time. With annual hospital cover premiums starting at $440.29^ a year for under-31s in the Northern Territory, it makes sense for them to take out private health insurance. They could be $440 better off and have the peace of mind that if they did go to hospital then they could avoid lengthy waiting times and be able to choose their own doctor.

“Medicare is not free. Most Australians already pay a 1.5% Medicare levy on their taxable income, which is going up to 2% from 1 July 2014. Australians earning above $88,000 that don’t have health insurance pay up to an additional 1.5% surcharge on top of this levy. Given that hospital cover is up to $440 cheaper than the MLS for under-31s living in the Northern Territory, and you get the added benefits of being a private patient in a public hospital – it’s a no brainer that people should take out private health insurance,” said Grant Waldeck, spokesperson for

“Lack of understanding of the implications of the MLS or the price of basic hospital cover is the only possible explanation for under-31s in the Northern Territory earning above $88,000 a year not to have private health insurance. Who doesn’t want an extra $440 in their back pocket, as well as the peace of mind that they could jump the public hospital queue if they need treatment?” added Grant.

A recent survey conducted by suggests that 39% of Australians don’t understand the MLS, and knowledge of its implications seem to diminish with youth. Some 29% of over-55s, 30% of 45-54 year olds, 32% of 35-44 year olds, 43% of 25-34 year olds and 65% of 18-25 year olds admitted to only having a limited understanding of the MLS. has identified eight basic hospital cover policies that cost at least $200 less than the MLS:


InsurerFundAnnual amount
HCFBudget Hospital $450$440.29
Australian UnityBasic Hospital$541.42
NibBasic Hospital ($500 Excess)$581.29
HifGoldStarter Hospital $200 Excess$632.62
FrankBasic Hospital $500/$1000 Xs$647.46
NibBasic Hospital ($250 Excess)$650.13
CBHS – RESTRICTED FUNDBasic Hospital Excess 500$653.10
GMBHABronze Hospital Level 2 Excess$660.79


*Anyone wanting to take out private health insurance after the age of 31 years old will have to pay 2% on top of their hospital cover premiums for every year they’ve been without cover since they turned 31.

^Assuming a salary between $88,001 and $102,000 and selecting to reduce your premium by applying your rebate.

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