A 2% lifetime Health Cover loading (LHC) is added to your health insurance premium for every year you don't have hospital cover over the age of 30. That fee accumulates, so if you go without hospital insurance until you're 40, you'll be hit with a 20% fee. It also stays in place until you've held hospital insurance for 10 years.
The Medicare Levy Surcharge (MLS) is an additional tax that you have to pay if you earn over $93,000 as a single or $180,000 as a family. Depending on how much you make, you'll pay a levy of between 1% and 1.5% of your annual income — that's between $75 and $181 more tax a month.
You only need a basic or bronze health insurance policy to avoid both of these surcharges. That's great news, because these policies tend to be very affordable. Here are a few basic and bronze policies available from Finder partners. All prices are based on a single individual with less than $93,000 income and living in Sydney.
| Response | 75+ yrs | 65-74 yrs | 55-64 yrs | 45-54 yrs | 35-44 yrs | 25-34 yrs | 18-24 yrs |
|---|---|---|---|---|---|---|---|
| Yes | 65.91% | 62.21% | 56.52% | 54.44% | 59.46% | 60% | 47.06% |
| Somewhat | 34.09% | 35.47% | 39.13% | 41.42% | 37.84% | 36.32% | 44.71% |
| No | 2.33% | 4.35% | 4.14% | 2.7% | 3.68% | 8.24% |
You can avoid the lifetime health cover loading penalty by taking out basic hospital insurance with an excess of $750 or less for singles before 1 July following your 31st birthday.
Let's put that in real terms. Say a health insurance policy is available for $600 per year. If you wait to take out your first policy at 40 it's going to cost you 20% more than that – $720 per year.
Here are a few more examples:
| Age | Loading | Cost of cover | You've had cover since 31 | If this is your first hospital cover |
|---|---|---|---|---|
| 35 | 10% | $600 | $600 | $660 |
| 40 | 20% | $650 | $650 | $780 |
| 50 | 40% | $700 | $700 | $980 |
| 60 | 60% | $800 | $800 | $1280 |
Health insurance offers a lot more than just the ability to avoid additional taxes and surcharges. For people in their 30s, there arelots of ways you can benefit from the right health insurance policy. You can roughly divide those benefits into extras and hospital cover.
Dental Coverage: Dental services aren't covered under Medicare for most people, but are super important for 30-somethings. An extras policy with general dental coverage will cover post preventative treatments, while major dental is what you'll need for coverage for things like major surgery and braces.
Optical: Have glasses? If so, optical coverage is going to be super useful for you, and can cover the cost of prescription and contact lenses.
Physiotherapy: As we get older, things start to go wrong with our bodies, especially if we exercise regularly! Extras coverage can chip in on the cost of regular physio sessions.
Healthy lifestyle: Lots of extras policies are increasingly offering benefits for the costs involved in staying healthy through your life, which can prevent health problems down the line. This can include benefits for gym memberships, pilates, quit smoking aids and more.
Bone, joint and muscle treatment: In your 30's you're probably still staying active, and issues with your bones, joints and muscles are likely to start cropping up. All bronze policies include cover for private bone, joint and muscle treatments, including joint reconstructions.
Gynaecology, miscarriage and pregnancy termination: If they are relevant to you, these services are covered under all bronze hospital policies. These can be more and more important for people in their 30s, so may be worth considering cover for.
Pregnancy: If you're thinking of having a baby and you'd like to access the benefits of the private system, you'it's worth considering a silver or gold hospital policy that covers pregnancy and childbirth.
Ambulance: Most hosptial, extras and combined policies include cover for emergency Ambulance transport, which is not covered under Medicare in most states.
If you're ready to jump into a new health insurance policy, one of the best ways to start is with a sign-up deal. Here are a few of the best sign-up deals that are currently live from Finder partners.
Find out how to get cheap health insurance for young people.
Find out which health funds offer rewards points and discount for getting healthy.
What are private health insurance loyalty programs and what sorts of benefits can they offer you? Find out here.
