Basic tier
Basic-tier hospital policies don't cover much. In fact, they are only required to offer restricted cover for 3 treatments. However, there are some other benefits to a basic hospital policy, including some tax implications. Here are a few groups of people who may benefit from basic coverage:
- 30 year-olds: A basic hospital policy is all you need to avoid the LHC loading. The usual deadline to take out hospital cover without a loading is the 1 July following your 31st birthday. Miss it and the LHC will add 2% per year onto the cost of any future private health insurance policy you choose to take out.
- High income earners: If you earn more than $105,000 a year as a single (or $210,000 as a family), you'll be subject to the MLS, an additional tax on your income. You can avoid the MLS completely by holding even a basic-tier hospital policy. Sometimes, the cost of the policy can be less than the amount the MLS would cost you.
- Young people with basic needs: A lot of "basic plus" policies cover more than just the basics, generally for slightly more than a bare-bones basic policy. If you're in good health and aren't planning on having children in the private system, then a basic plus policy might suit you.
