It's a great time to check on your private health insurance

Man in living room filing income tax

The end of the financial year is always hectic – it’s tax time but also an opportunity to review your finances … and the perfect time to check in on your private health insurance.

Modern life is a challenge. Competing priorities often make it easy to overlook changes to your lifestyle – and the impact they have on your private health insurance needs.

At Westfund, we’re with you every step of the way.

We’ll help you to learn more about your current cover – and to be confident that your cover is aligned with your current lifestyle and health needs.

It pays to know about how your private health insurance can potentially impact you at the end of the financial year.

The Medicare Levy Surcharge and the Australian Government Rebate on private health insurance are the key things to be aware of at tax time.

Medicare Levy Surcharge (MLS):

Did you know that if you don’t have a suitable level of private hospital cover and earn above a certain level of income, you could be affected by the Medicare Levy Surcharge?

MLS is a levy paid by Australian taxpayers who don’t have an appropriate level of private hospital cover and who earn above a certain annual income.  It’s in addition to the compulsory Medicare Levy of two per cent, which is paid by most Australian taxpayers to help fund Medicare.

The surcharge aims to encourage individuals and their families in higher income brackets to take out private hospital cover and where possible to use the private system to reduce the demand on the public system.

The surcharge is calculated at the rate of 1 per cent to 1.5 per cent of your income (or the income for you and your partner).

The Medicare Levy Surcharge levels applicable to 30 June 2021 are:

Singles less than $90,000 $90,001-105,000 $105,001-140,000 more than $140,001
Families less than $180,000 $180,001-210,000 $210,001-280,000 more than $280,001
All ages 0.0% 1.0% 1.25% 1.5%

To give you an example, as a single:

  • Without suitable Hospital cover, the Medicare Levy Surcharge on $140,001 income is $2,100^.
  • Westfund’s mid-level Silver Hospital cover yearly premium is $1,677.52* - $422 less than the surcharge above.

Why pay an extra $422 when you can have the benefits of a mid-range Hospital cover with the peace of mind it provides?

With Westfund Hospital cover, you’ll have greater flexibility to choose your doctor and hospital and to avoid public waiting lists. (If you are a private patient in a public hospital, public hospital waiting lists will still apply.)

The Australian Government Rebate on private health insurance:

The rebate helps offset the cost of private health insurance premiums for policyholders. The rebate is income-tested and applies to hospital, extras and ambulance policies.

It’s recognition by the government that consumers who invest in private health insurance are taking responsibility for their own healthcare needs, while also contributing significantly to the Australian healthcare system.

It also recognises the fact that private healthcare users take pressure off the public system, especially with respect to public hospitals.

The rebate is income tested. Depending on income thresholds, you may be entitled to a reduced rebate. Different thresholds apply depending on whether you have a single income or a family income. You can read more about the thresholds here.

A couple of other things to bear in mind when reviewing your cover:

  • Take note of what is and isn't covered on your policy - not all policies are comprehensive. Depending on your level of cover, you may not be fully covered against all costs associated with your treatment and will have to pay some out-of-pocket costs
  • If you have cover and the premium has become a concern for you, we’re here to help. We make switching to Westfund easy
  • You might also consider Extras cover for items such as optical, dental, physiotherapy or chiropractic treatments.

For more information about the Australian Government Rebate and the Medicare Levy Surcharge and how it may affect you at tax time, please refer to the Australian Taxation Office.


* Premium quoted is based on Westfund Silver Hospital cover NSW single policy with $750 excess assuming no Lifetime Health Cover loading, no Australian Government Rebate and no Age-Based Discount, effective 1 April 2021.

^ Income is based on the Australian Taxation Office’s definition of income and is not indicative of someone’s taxable income.