The Australian Government has a range of initiatives and programs to encourage Australians to protect themselves with private health insurance.

Australian Government Private Health Insurance Rebate

Australians who take out private health insurance cover are eligible to receive the Australian Government Rebate to help cover the cost of their premiums.

This rebate is income-tested and based on your ‘status’ of 30 June. So if you were single, had a spouse or were a single parent on 30 June, then this is the threshold applied to your Private Health Insurance Rebate.

You may claim the private health insurance rebate if you:

  • are eligible for Medicare
  • have a residential hospital cover, an extras cover (also known as ancillary cover) or both
  • have an income for Medicare Levy Surcharge purposes

From 1 July 2015 to 1 July 2020, the income thresholds used to determine a person’s eligibility for the Rebate are based on the following table.

Rebate Income Tier

The Rebate percentages are adjusted an annually on 1 April based on the Rebate Adjustment Factor. The current percentages are as follows.

Rebate Age Tier
Private Health Insurance Rebate effective from 1 April 2018

There are two ways you can claim your rebate:

  • As a premium reduction through Doctors’ Health Fund. To do this, please call us on 1800 226 126.
  • As a tax offset when lodging your annual tax return. For more information, visit the Australian Taxation Office website at www.ato.gov.au or call 132 861.
The Medicare Levy Surcharge (MLS)

This is levied on Australian taxpayers who earn above a certain income and do not have private hospital cover.

The surcharge is calculated at the rate of 1% to 1.5% of your income. It is in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers.

MLS Table
Medicare Surcharge levels applicable from 1 April 2017 - 1 March 2018

To work out your annual income for MLS and Rebate purposes, you can refer to the Australian Taxation Office’s Private Health Insurance Rebate Calculator or contact the ATO directly on 132 861.

Lifetime Health Cover (LHC)

LHC is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their hospital cover. It does not affect extras cover.

This is how it works:
If you did not have hospital cover with an Australian registered health fund on your Lifetime Health Cover base day and then decided to take out hospital cover later in life, you pay a 2% loading on top of your insurance premium for every year you are aged over 30.

What's my base day?
In most cases, your LHC base day is the 1st of July following your 31st birthday, after 1 July 2000.

For example, if you first took out hospital cover at age 40 you pay 20% more than someone who first took out hospital cover at age 30.

Once you have paid LHC loading on your private health insurance for 10 continuous years, the loading is removed.
Your loading will remain at 0% as long as you retain your hospital cover, or if you cancel your cover after the loading is removed, as long as you do not exceed your permitted days without hospital cover.

To cover small gaps, such as switching from one insurer to another, you can stay without private health insurance for periods totalling 1,094 days (i.e.) three years less one day during your lifetime, without affecting your loading.

New migrants
As a new migrant to Australia, if you are aged 31 or over you will not have to pay LHC loading if you take out private health insurance within 12 months of being registered for Medicare. After this time you will have to pay 2% more for each year you are aged over 30 when you take out private health Insurance.

Visit www.privatehealth.gov.au for detailed information about how LHC works and the exemption categories.

Alternatively, you can email us at info@doctorshealthfund.com.au or call to speak to one of our expert Member Service specialists on 1800 226 126.