The MLS differs from the Medicare levy, which is a two per cent tax paid by most taxpayers to fund the public healthcare system. For those on higher incomes, The MLS is payable in addition to the Medicare levy.
Thankfully, the MLS can be easily avoided by taking out hospital cover, though keep in mind if you haven’t held it for the entire financial year, you could have to pay the MLS for each day you didn’t hold cover.
If you earn less than a specified amount, you will not pay the MLS. If you earn above the respective income threshold and do not hold an appropriate private hospital policy, you will pay the MLS for every day of the financial year you aren’t insured.
Please note: Taking out an extras cover policy as a standalone product will not prevent you from paying the MLS.
If you are exempt from the Medicare Levy, you could also be exempt from the MLS. For part of (or the entirety of) this financial year;
If any of the above conditions apply, you may be exempt from the Medicare levy and Medicare Levy Surcharge, but we recommend you visit the ATO’s website to make sure.
Taking out hospital cover will not only help you avoid the MLS, but it also helps pay for your treatment as a private patient, allows you to choose your doctor, have a private room (if one’s available) and avoid public waiting lists.
Australia’s public hospital waiting lists have been growing steadily in recent years, as illustrated in the chart below, making this product even more appealing.
Source: Elective surgery waiting times 2017-18, Australian Institute of Health and Welfare, Australian Government. 2019.
Nobody wants to pay extra tax if they can help it. Regardless of whether you’ve used a MLS calculator or not, there are more benefits to hospital cover than just avoiding a surcharge.
If you’re considering private hospital insurance for yourself or your family, comparing policies is a great place to start. Our free health insurance comparison service lets you review policies available from a range of brands in minutes.
It couldn’t be easier to compare prices and coverage, so why not see what we have to offer?