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Suspending your health insurance policy

You can suspend health insurance for several reasons, which can save you money in a few ways.

Can you suspend your health insurance policy?

Most health funds let you suspend your health insurance cover. That said, the minimum and maximum times for which you can suspend cover varies between brands. The following limits commonly apply:

  • You can suspend your membership for a minimum of 2 months
  • You can suspend your membership for a maximum of 2 years
  • The number of suspensions allowed per calendar year is usually limited to 1 or 2
  • A separate limit may apply to the maximum suspension allowed for financial hardship, for example 3 months
  • There may also be a lifetime limit on the number of financial hardship suspensions permitted

Check the fine print with your health fund for full details of any limits that apply.

Who is eligible to suspend cover?

Eligibility rules for temporarily suspending your health insurance policy vary between funds. However, to qualify for this option you will typically need to:

  • Have been an active member of the health fund for at least 12 consecutive months
  • Have all your premium payments up to date

If going overseas, you will also need to apply for a suspension prior to your departure date as you cannot retrospectively apply to suspend cover.

Finder survey: How often do Australians compare or switch health insurance?

Response
I never compare or switch insurance31.46%
About once a year29.96%
About every 2 yrs18.35%
About every 3+ yrs14.04%
More than once a year6.18%
Source: Finder survey by Pure Profile of 1006 Australians, December 2023

Which health funds let you suspend health insurance cover?

Every Australian health insurance provider has the option to suspend your coverage. However, some health funds are more flexible with their suspension policy than others. Finder makes it easy to compare health insurance from these funds for free.

FundAllows health insurance policy suspensions?Can I suspend my cover because of financial hardship?Can I suspend my cover if I become unemployed?Minimum amount of time to be overseasMaximum time to suspend cover
AAMI Health Insurance
Not mentioned2 months2 years
ahm Health Insurance
30 days2 years
CUA Health Limited
Not mentioned2 months3 years
HCF
Not mentioned30 days2 years
Medibank Private Limited
Not mentioned2 months4 years
NIB Health Funds Ltd.
Not mentioned2 months2 years
Qantas Health Insurance
Not mentioned2 months2 years
Suncorp Health Insurance
Not mentioned2 months2 years
ACA Health Benefits Fund
Not mentioned3 months2 years
Australian Unity Health Limited
Not mentioned2 months2 years
Bupa Australia Pty Ltd
Not mentioned2 months2 years
CBHS Corporate Health Pty Ltd
Not mentioned6 weeks3 years
CBHS Health Fund Limited
Not mentioned6 weeks3 years
Defence Health Limited
Not mentioned28 Days2 years
Doctors' Health Fund
Not mentionedNot mentioned1 monthNot mentioned
Emergency Services Health
Not mentioned14 Days2 years
GMHBA Limited
Not mentionedNot mentioned1 month3 years
Grand United Corporate Health
Not mentioned2 months2 years
HBF Health Limited
Not mentionedNot mentioned2 months6 months
Health Care Insurance Limited
Not mentioned28 days2 years
Health Partners
Not mentioned3 weeks2 years
HIF
Not mentionedNot mentioned2 months2 years
Hunter Health Insurance
Not mentionedNot mentioned2 months2 years
Latrobe Health Services
Not mentionedNot mentionedNot mentionedNot mentioned
Mildura Health Fund
Not mentionedNot mentioned2 weeks2 years
National Health Benefits Australia Pty Ltd (onemedifund)
Not mentionedNot mentioned2 years
Navy Health Ltd
Not mentioned1 month2 years
Nurses & Midwives Health
Not mentioned2 months3 years
Peoplecare Health Insurance
4 weeks2 years
Phoenix Health Fund Limited
Not mentionedNot mentioned21 days2 years
Police Health
Not mentioned14 days2 years
Queensland Country Health Fund Ltd
Not mentioned1 month2 years
Railway and Transport Health Fund Limited
Not mentionedNot mentioned28 days2 years
Reserve Bank Health Society Ltd
3 months40 months
St.Lukes Health
Not mentionedNot mentioned2 weeks2 years
Teachers Health Fund
Not mentioned2 months36 months
Transport Health Pty Ltd
30 days12 months
TUH
2 months3 years
Westfund Limited
2 months24 months

The tax impacts of suspending health insurance

While suspending your health insurance policy can save you money on your premiums, there are other tax implications that you may face by not have adequate coverage, depending on your circumstances. The main ones you need to worry about are the Lifetime Health Cover Loading and the Medicare Levy Surcharge.

Lifetime Health Cover Loading

If you're 31 years or older, you can go without hospital cover for a total 1,094 days (around 3 years) without affecting your Lifetime Health Cover Loading. However, once you've used up 1,094 days without cover, the loading will kick in again, adding 2% to your future premiums for each year you're not covered.

Medicare Levy Surcharge

If you earn over $90,000 per year, you're probably required to pay the Medicare Levy Surcharge, an additional levy on your tax of between 1% and 1.5%. If you suspend your policy, you may have to pay the MLS in your tax return for that financial year.

Why would I want to suspend my health insurance policy?

People suspend their health insurance for many different reasons. Financial hardship is a major reason people do this. If you've lost your job or are battling debt problems and struggling to meet your premium payments, your health fund may agree to let you suspend your membership for a temporary period.

Another common reason for suspending a policy is overseas travel. Australian private health funds are unable to provide any cover for medical expenses you incur overseas – you’ll need overseas travel insurance for that sort of protection – so if you’re going to be out of the country for a couple of months or more, suspending cover makes good financial sense.

Why not just cancel my policy?

When your health fund agrees to allow you to suspend your membership for a temporary period, you will not have to re-serve any waiting periods when you resume cover at a later date. You will also be able to maintain the level of cover that suits your needs and keep the current benefit limits that apply to your policy.

But if you decide to cancel your health insurance and then take out a new policy sometime in the future, you will have to serve the full waiting periods set by the fund before you can claim any benefits. This could have a serious impact on your ability to access the health care you need, especially if you develop any health problems which will then be classed as pre-existing conditions by your new fund.

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