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– It’s often cheaper to choose separate health insurance policies for adults living together rather than one Couples policy – Every member of the family needs health cover to avoid the Medicare Levy Surcharge, but they can be on separate policies – healthslips.com.au allows you to search every policy on the market, without entering your contact details
If you have one household health cover policy, here’s a health insurance hack that could save you a lot of money. While having one health insurance policy for the household is convenient, you can often save by having individual policies. If one person needs Gold or Silver tier cover for high-expense claims, for example childbirth or insulin pumps, but the other person only needs basic dental check-ups, being on the same policy could cost you as much as $2,300+ extra every year, healthslips.com.au data shows.
The maths behind the unbundling hack
Our expert team crunched the numbers, using the healthslips.com.au calculator. We worked out that a mid-range Combined Hospital and Extras Cover policy from one of the big four insurers, with Silver Plus tier Hospital Cover and an Extras Cover policy that included general dental, optical and physiotherapy, for a family in Victoria was around $588.70/month, with a $750 excess, as of August 2026. But if both adults got separate cover at different tiers, here’s how the costs work out.
Silver Plus Hospital & Extras Cover, 2 adults with dependants, Victoria
Policy type
Tier
Monthly cost
Annual cost
Combined annual household total
Combined Cover for whole family
Silver Plus with basic Extras Cover
$588.70
$7,064.40
$7,064.40
Combined Cover for one adult (higher cover needs)
Silver Plus with basic Extras Cover
$203.24
$2,438.88
$4,677.48
Combined Cover for one adult and kids (lower cover needs)
Basic Plus with basic Extras Cover
$186.55
$2,238.60
Difference (amount saved)
$2,386.92
Comparison performed August 2026 at healthslips.com.au.
By switching from a mid-range family policy to separate policies, this family in Victoria could save $2,386.92 a year.
Some insurers charge more to add kids to a Single adult policy (turning it into a Single Parent policy) than they do to add kids to a Couples policy (turning it into a Family policy). That means this unbundling hack might not work with every insurer.
How can I take advantage of the unbundling hack?
The best way to take advantage of the unbundling hack for household health cover is with the healthslips.com.au calculator. While other health insurance comparison sites only show you a select number of policies from certain insurers, healthslips provides unbiased comparisons from all 45 insurers in the market.You can use our calculator to unbundle your household to find the lowest premium – cheapest policy guaranteed – and unlike other commercial comparison sites, you can use healthslips.com.au 100% anonymously, with no phone or email spam.
To take advantage of this, work out the different health needs of each of the 2 parents. Whichever parent has lower health needs should have the kids attached to their policy. Then, use the healthslips.com.au calculator to calculate the premiums of 2 separate policies in your state or territory – one policy as a single adult, and one policy as a single adult with dependants (you don’t need to say how many kids, since it doesn’t change the price – unless they’re adults).
Add up the total of the 2 policies and compare it to what you’re currently paying. If it works out cheaper, our calculator will guide you through the steps to switch policies. Your new insurer will take care of the paperwork for you.
Remember, if you switch to a Hospital Cover policy at the same tier/level or lower, you won’t have to serve waiting periods again.
Yes, but it might affect you at tax time. If your combined household income is above the Medicare Levy Surcharge threshold for families, every member of your family (including newborn babies) must have Hospital Cover for every day of the financial year in order to be exempt from paying the Surcharge. That applies even if one of the adults in the household earns below the threshold. However, you don’t all have to be on the same policy, so the unbundling family policies hack still helps you avoid the Medicare Levy Surcharge.
The Medicare Levy Surcharge thresholds change every year and you might be surprised to find you’re earning over the threshold – you don’t have to be a high income earner to be affected. We update the threshold information every year, so check current income brackets here.
How can I take advantage of the health insurance unbundling hack?
Work out the different health needs of each parent in your household. The parent with lower health needs should have the kids attached to their policy. Then use the healthslips.com.au calculator to price up 2 separate policies for your state or territory – one Single Adult policy and one Single Parent policy – and add the 2 premiums together. Compare that combined total to what you’re currently paying for one Family or Couples policy. If it’s cheaper, your new insurer will handle the switch paperwork for you. If you move to a Hospital Cover policy at the same tier or lower, you won’t need to serve waiting periods again.
Can I buy a separate health insurance policy just for my kids?
In most cases, no. Only 2 insurers in Australia offer kids-only health insurance policies, and both are restricted insurers available only to certain groups: Defence Health and Navy Health. If you’re eligible for cover with either of these insurers, you can compare their policies against the rest of the market using the healthslips.com.au calculator, which includes restricted insurers.
First, compare policies to find one that offers real value, checking that it covers your health needs and confirming any waiting periods or limits – switching to a Hospital Cover policy at the same tier or lower means you won’t have to re-serve waiting periods. Once you’ve chosen a new insurer:
get a written quote and review the details
cancel your current policy, including direct debits
contact your new insurer to start the new policy and make sure your Transfer Certificate is sent across from your old insurer
check your bank statement to confirm the new cover has started, the old one has ended, and there’s no overlap.
Most insurers also give you a 30-day cooling-off period if you change your mind, with a refund available if you haven’t claimed any benefits.
What’s the cheapest health insurance to avoid the Medicare Levy Surcharge?
To avoid the Medicare Levy Surcharge (MLS), you need Hospital Cover that covers you and every member of your household, with an excess of $750 or less for a single adult, or $1,500 or less for couples, single parents and families. The cheapest option should cost less than the surcharge itself, which is charged at 1%, 1.25% or 1.5% of your income depending on how much you earn. Find tips on searching for the cheapest health insurance to avoid the Medicare Levy Surcharge here.
healthslips.com.au does not provide general or personalised advice. Your particular circumstances are likely to impact the accuracy, completeness and relevance of the information or results. Take this into account before making a decision and talk to an expert for financial advice.
Trudie McConnochie
Writer and Researcher
Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.
Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.
Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.
