Health insurance in your 30s - the facts.

You may want to think about taking out private health insurance

You may have noticed, once you turn 30, there seems to be a lot of noise about private health insurance. So what are the facts? Here are some of the key things you need to know:

1. Prices start to rise after your 31st birthday

If your 31st birthday is coming up this year, you may want to think about signing up before 30 June.

If you don't have an eligible hospital cover by the time 1 July rolls around and do decide to get private health insurance, even one day after the end of financial year, you'll be paying an additional 2% per year. This is all thanks to a lovely little government initiative called the Lifetime Health Cover loading (LHC). Oh, it will also increase an additional 2% each year - so even if you're a year or two late, it's probably worth comparing your options.

This is different from the Medicare Levy Surcharge, which is an additional cost you may have to pay each EOFY depending on your annual income (we'll get onto that next).

2. There's a tax surcharge if you earn over $90k

It's called the Medicare Levy Surcharge (MLS), and it's an additional tax that you may have to pay in your tax return.

Medicare Levy Surcharge is a penalty that affects singles earning over $90,000 and families earning over $180,000 and means you'll pay a levy of between 1% and 1.5% of your annual income (depending on how much you make).

To dodge the tax, you'll need to take out private hospital cover. You only have to pay a charge for the days you don't have private cover.

You can get the absolute basics with minimum cover to tick the box and save on your taxes, alternately, you can spend a little more and get heaps of benefits in return.

Signing up early to save in a few years

Thanks to Government initiative number 2, Lifetime Health Cover Loading - It could be worth taking the jump sooner rather than later.

Once you turn 30, a 2% loading is added to your hospital cover costs for every year you’re without hospital cover. So when you do eventually take it out, it will cost you a lot more than your mate who took out private cover before 31.

Let’s put that in real terms. Say a health insurance policy is available for $600 per year, well if you only take out your first policy when you're 40 it’s going to cost you 20% more than that – $720 per year.

Here are a few examples:

AgeLoadingCost of coverYou’ve had cover since 31If this is your first hospital cover

Waiting till you're 40 will cost you big bucks

If we say the average singles hospital and extras policy today cost $2,000, by the time you looked at getting health cover and you're over at 40, that policy would cost $3,384. But that's without the LHC loading, that's just following the average 5.4% premium increase. That policy with the LHC loading would be $4,061. That's an extra $677 in year one alone.

Over the 10 years of the LHC period, you're paying $8,673 in LHC penalties and these penalties go to the insurer, not into the public health system.

So, while you may have saved directly over the 10 years you didn't have cover (assuming you didn't have to pay any unexpected medical fees), your average premium per year is almost $2,000 more than someone who took out cover before 31. Plus, you weren't able to claim for hospital or extras benefits during that time.

Compare health insurance quotes in just 5 clicks

How Lifetime Health Cover Loading works

Grab a great sign-up deal this July

Store Discount

Get up to $200 off when joining hospital & extras

Singles and single parents get up to $100, couples and families get up to $200.

Last verified

Coupon code ends

Claim straight away on extras including general dental, optical and physiotherapy.

Join hospital and extras to skip waiting periods for any extras with a 2 or 6 month wait.

Last verified

Coupon code ends

Get 1 month free. Plus skip some waiting periods including general dental & optical.

Offer applies when signing up for both hospital + extras.

Last verified

Get deal

Deal ends

Save up to $300 when joining hospital & extras

Singles and single parents can save up to $150, couples and families can save up to $300. T&C applies.

Last verified

Get deal

Deal ends

Get up to 100,000 Qantas points

Plus earn 2 points per $1 spent in your first 12 months when signing up to a Qantas health insurance policy.

Last verified

Get deal

Deal ends

Get up to $300 off

When signing up for hospital and extras combined in August.

Last verified

Get deal

Deal ends

Get a 4% discount on your CUA Health premium

Offer applies when paying by direct debit from a CUA transaction account

Last verified

Get deal

Picture: Brooke Lark - Unsplash

You might like these...

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site