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Do you earn more than $90,000 as a single, or $180,000 as a couple/family, and do not hold private hospital cover?

You may need to pay up to 1.5% of your taxable income towards the Medicare Levy Surcharge (MLS). This surcharge is designed to encourage higher-income earners to take out private hospital cover, rather than just relying on Medicare.

See if you’re impacted by using our Medicare Levy Surcharge calculator.

I earn above the threshold. Can I avoid the MLS?

The only way to avoid paying the MLS is taking out private hospital cover. In addition, this policy must have an excess or co-payment of no more than $750 for singles, or $1,500 for couples/family.

SinglesUnder $90,000$90,001 – $105,000$105,001 – $140,000$140,001+
Families ^Under $180,000$180,001 – $210,000$210,001 – $280,000$280,001+
Retrieved from Privatehealth.gov.au | Information current as of 03/04/2017
^ For families with children, thresholds increase by $1,500 for each child after the first. Families include couples, de facto couples, and single parents.

Take out private health cover, or pay the MLS?

Many Aussies aren’t convinced they need private hospital cover – and some of them will instead opt to pay the MLS. If you’re undecided, you need to ask yourself some questions.

  • Can I find health cover that costs less than the surcharge? The answer could be yes, although you should make sure that such a policy actually offers great value. The best way to do that is by comparing a range of policies side-by-side (don’t worry, you can do that here).
  • Will I eventually take out private hospital cover? If you’re putting off the process of getting insured, there are several drawbacks for procrastinating. For example, anyone over the age of 31 may end up paying LHC loading – if they eventually get covered.
  • Would I get the most from my hospital cover? Perhaps your life changed enough for you to take advantage of a hospital insurance policy. Are you considering having kids? Do you tend to have more health problems now than you did when you were younger? Would you prefer to be treated as a private patient?

If you answered ‘yes’ to any of the above, then hospital cover could be a smart purchase for you. It’s a decision you’ll ultimately need to make on your own, but we’d be happy to help you decide. Whether you prefer to compare different policies online or give our experts a call to discuss your needs in detail, we’ve got your back.

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