The Australian Government encourages you to take out private health insurance through the Government Rebate, Age-based Discount and Lifetime Health Cover Loading. It is important to personalise your price.
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How the Australian Government encourages you to take out private health insurance
Although Australia has a public health system, known as Medicare, the Australian Government encourages everyone to take out private health insurance to ease the pressure on the public health system.
Before deciding whether to take out private health insurance, especially Hospital Cover, understand the implications of not taking out cover, especially if you want to postpone taking out private health insurance until later in life.
Discounts on private health insurance for people earning under a certain amount
If you have an income below a certain amount, you may be able to save on Hospital Cover, Extras Cover and Ambulance Cover through the Private Health Insurance Rebate (Government Rebate).
Incentives to take out Hospital Cover in your 20s
If you are under 30, you may be able to save up to 10% on Hospital Cover through the Age-based Discount (Discount).
Penalties if you take out Hospital Cover after the age of 30
If you postpone taking out Hospital Cover until you are over 30, you are likely to have to pay the Lifetime Health Cover Loading (Loading). This will increase the price of health cover at 2% per year up to a maximum of 70%.
Penalties if you earn over a certain amount and do not take out Hospital Cover
If you earn over a certain amount and do not take out Hospital Cover, the Australian Government will charge you up to 1.5% extra in tax through the Medicare Levy Surcharge.
It may be cheaper for you to take out Hospital Cover than to pay more tax.