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Should you get private health insurance before you turn 31?
If you’re under the age of 31, you might be wondering whether you need health insurance. You may have even caught wind of a “health insurance tax” for people without cover.
Health insurance can be a good option if you’re under 31 years old and want to:
- avoid Lifetime Health Cover (LHC) loading
- avoid paying the Medicare Levy Surcharge (MLS) come tax time
- receive discounts because of your age, and
What is the Lifetime Health Cover loading?
Lifetime Health Cover (LHC) loading is a government initiative created to encourage younger Australians to get private health insurance.
If you wait until after your 31st birthday to get private health insurance, 2% is added to your hospital premium for every year you don’t have it.
For example, if you sign up to private health insurance at age 40, there’ve been 10 years when your LHC loading has increased each year. So, your premium after ten years would be 20% higher than if you had taken out private health insurance when you turned 31.
Your LHC loading is only removed after 10 years of continuous hospital cover — so it can be cheaper to get private health insurance when you turn 31.
You can avoid paying the additional LHC by taking out private hospital cover by the first of July following your 31st birthday. As long as you keep your private hospital cover, you can avoid paying the 2% annual loading.
What is the Medicare Levy Surcharge (MLS)?
The MLS is an extra 1-1.5% in tax paid by Australian residents who earn over $90,000 for singles (or $180,000 for couples or families) and who don’t have private hospital cover.
It can be cheaper to take out health insurance to avoid paying up to $900 more in tax for every year you don’t have the right level of hospital cover*.
To avoid paying the MLS, join AAMI Health Insurance Hospital Cover before 1 July and maintain your hospital cover for the full financial year. Find out more about MLS income brackets and surcharge rates through the ATO’s dedicated page.
Receive discounts on your hospital cover
Who doesn’t love a discount? With AAMI Health Insurance Hospital Cover, our age-based discount (ABD) can save you up to 10% off your hospital cover.
The ABD is available to new and existing members aged 18-29 who take out AAMI Health Insurance Hospital Cover.
As long as you hold your eligible hospital cover, you could keep this discount until you turn 41 before it slowly drops 2% every year after that.
Your discount depends on your age when you take out AAMI Health Insurance Hospital Cover.
More ways to save
Did you know there are even more ways to lower your premium? If you want cover without all the extras, AAMI Health Insurance Basic Hospital Plus can be a great way to benefit from basic hospital cover.
And if you pay with direct debit, you can save an extra 4% on our health cover options on top of that. To start paying by direct debit, just log into your AAMI online account and update your direct debit details.
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AAMI Life Insurance products, are provided by either Asteron Life & Superannuation Limited ABN 87 073 979 530, AFSL 229880 (Asteron) or by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). Both Asteron and TAL Life are part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL companies are not part of the Suncorp Group. TAL companies use the AAMI brand (a Suncorp network brand) under license.
Any advice on this page in connection with the Life products is general in nature and is provided by Platform Ventures Pty Ltd ABN 35 626 745 177 AFS Representative Number 001266101 (PV). PV is part of the Suncorp Group and an authorised representative of TAL Direct Pty Limited ABN 39 084 666 017, AFSL 243260 (TAL Direct). General advice does not take into account your individual needs, objectives or financial situation. Before you decide to buy or to continue to hold a Life Products you must read the relevant Product Disclosure Statement.