Health Insurance FAQs

Medicare covers a range of medical services and medications for Australian citizens, but it doesn’t cover everything. Medicare is essential coverage that can protect you if you’re injured or sick.

If you’re young and don’t go to the doctor’s office very much, Medicare might be enough for you. Once you get older and start making more money, though, it may be beneficial for you to begin purchasing coverage from private insurers.

  • Choose your doctor
  • Avoid wait times for elective surgeries
  • Avoid expensive charges for procedures and therapies you can’t afford
  • Gain flexibility in where and when you receive treatment
  • Choose a private hospital room
  • Receive dental, optical, psychology and alternative checkups and therapies Medicare doesn’t cover

As a way to incentivise citizens purchasing private health insurance, the government enacted the Australian Government Private Health Insurance Rebate.

Through this program, the government will pay a portion of your private insurance premium for you. You can choose to get the amount deducted from your monthly premiums or receive the money when you complete your taxes.

These tax rebates vary based on individual needs. Your rebate will depend on your income, family status, and insurance premium rate. The tax rebate does not consider loading fees as part of your premium.

The Medicare Levy Surcharge is one of the ways the Australian Government is attempting to lighten the burden on the Medicare system.

If you or your family makes over a certain amount each year and doesn’t pay for private hospital cover, you’re obligated to pay the Medicare Levy Surcharge. If you have hospital cover, you won’t have to pay this fee.

Click here to visit the Medicare Levy Surcharge Calculator.

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you’ll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you’re liable for if you don’t have private hospital cover.



Your Medicare Levy Surcharge is 0.00% of your income, or $0.00
Singles ≤ $90,000 $90,001 - 105,000 $105,001 - 140,000 ≥ $140,001
Families ≤ $180,000 $180,001 - 210,000 $210,001 - 280,000 ≥ $280,001
Medicare Levy Surcharge
Standard Tier 1 Tier 2 Tier 3
All Ages 0.0% 1.0% 1.25% 1.5%

Like the Medicare Levy Surcharge, the Australian Government created the Lifetime Health Cover to incentivise buying private health insurance.

The LHC rewards those who buy private health insurance early in life. On the other hand, if you have never purchased private health insurance by the age of 31, you will gain a loading (or in other words, an extra charge) on top of your premium should you take out private healthcare now or later.

Lifetime Health Cover also benefits those who never have gaps in coverage or people who quickly resolve any gaps that may take place.

If you fail to register for private hospital cover by the time you turn 31, you’ll start to accrue loading fees. You might have received a letter in the mail outlining the LHC rules, which signifies that your loading fees have started to accrue.

Loading fees are an additional cost to your private health insurance premium. They start gathering after your 31st birthday if you still haven’t purchased private hospital cover.

The loading fees rise at a rate of 2% for every year you fail to purchase coverage. If you sign up for private healthcare at 30, you won’t have any loading fees.

If you sign up for the first time at 40, however, you’ll pay an additional 20% of your premium in loading fees. This 2% loading applies up until a maximum loading of 70%.

Depending on your age, family status, and income level, you may be entitled to a Government Rebate on your private health insurance policy. Use the sliders and dropdown menu below to calculate your rebate.





Your Rebate is 0
Singles < $90,000 $90,001 - 105,000 $105,001 - 140,000 > $140,001
Families < $180,000 $180,001 - 210,000 $210,001 - 280,000 > $280,001
Rebate
Base Tier Tier 1 Tier 2 Tier 3
Age < 65 25.415% 16.943% 8.471% 0%
Age 65-69 29.651% 21.180% 12.707% 0%
Age 70+ 33.887% 25.415% 16.943% 0%

Avoiding LHC loading fees is rather simple if you have enough funds to pay for private hospital cover.

Lifetime Health Cover is an incentive to buy healthcare early, and doing so will ensure that you don’t have to pay loading fees in the future.

Just because you bought hospital cover in your 20s doesn’t mean you’re free and clear. You also must avoid gaps in coverage throughout your healthcare life. If you lose coverage for an extended period, your LHC loading fees will start to accrue once again.

No. If you purchase coverage after your 31st birthday, you’ll start with a loading fee but won’t have to pay it for the rest of your life.

After ten years of continued coverage, your insurer will remove the loading fees from your premium. You are even allowed “permitted days” without coverage during the subsequent ten years. These days won’t count towards your 10-year total, however.

During these ten years, you’ll be able to upgrade, downgrade, and change insurers without negatively affecting your loading fees.

If you remain covered for ten years and remove your loading fees, you might have to pay them again if you lose coverage for too long.

It’s not always possible to maintain coverage for your entire life. You might lose your job or come across financial hardship and have to cancel your policy.

The Australian Government understands that this is a possibility, and is therefore lenient with the accrual of loading fees if you have a gap in coverage.

After you purchase private hospital cover, the government allows for a total of 1,094 days without coverage before you start to gather additional loading fees.

These days are called “permitted days without hospital cover.” Keep in mind that the 1,094 days are throughout the total of your coverage. Once you use them, they don’t come back.

Once you exceed the 1,094 days, your loading fees will again start to increase by 2% for every year you remain uncovered. If you’re curious how many permitted days you have left, contact your insurance provider.

If you’re going overseas for an extended period, there are a couple of ways to stop paying your hospital cover while avoiding loading fees.

Suspension

If you are away for a few months, your best option will probably be a suspension of your coverage. You’ll have to contact your insurer to start the suspension, and the terms of the suspension are up to them.

Your insurer will determine how long you can go without paying for coverage. After that, you’ll have to start paying again or risk accruing loading fees.

Your suspension does not count toward your permitted days without hospital cover. In fact, if you’re already paying loading fees, your suspension will still count toward your 10-year window of complete coverage.

Cancellation

Your second option will be cancellation of your plan. If you’re spending more than a year in another country, the Australian Government allows you to cancel your policy while you’re away.

When you come back, you won’t have to pay any additional loading fees as long as you obtain coverage right away. The time between when you come back and when you purchase hospital cover will count toward your 1,094 permitted days without hospital cover.

Make sure you keep documentation of your travel while your away. Your insurer may require that you provide proof of your extended stay abroad to prevent further loading fees.

If you can’t afford private health insurance, Medicare is still a fine option. You’ll receive necessary care and checkups from public facilities as a public patient.

You might have to wait months or years for elective surgeries. Still, you’ll eventually be able to receive them free-of-charge.

If your annual income is under a certain amount, you won’t have to worry about paying your Medicare Levy Surcharge either.

The only element you’ll have to consider is your loading fees. If you can afford basic hospital cover, we recommend you do so to prevent your loading fees from accruing.