Lifetime Health Cover Loading & Medicare Levy Surcharge – what this really means to you

It’s almost June 30 – what do I do?

It’s the End of Financial year and each year you may hear about “Lifetime Health Cover Loading” or “LHC” but what does this really mean to you?

The Lifetime Health Cover Loading initiative penalises any Australian Citizens or Permanent Residents who do not take out Private Hospital cover from July 1st following their 31st birthday as well as people migrating to Australia who are over 30 and don’t take out cover within 12 months of arriving in Australia.

How does the penalty affect you?

Lifetime Health Cover Loading penalises you by adding 2% loading to your hospital cover for each year you fail to join after your cut-off date. For Example: If you take out hospital cover at age 40 you will pay 20% more than if you took it out at age 30.

“I’m over 31 with no health cover, does this mean I can’t afford it?”

Absolutely not, in fact here at Health Deal we pride ourselves on our ability to find an affordable and suitable option for you and your family. The maximum penalty loading is 70% which would apply to those aged 65 years or more – so, the sooner the better!

Keep in mind, once you’re in… You’re in! Your penalty loading is locked at the percentage at the time of joining and once you’ve held cover for 10 consecutive years the loading will be dropped completely. There is light at the end of the tunnel.

But wait, we can’t let LHC get all the attention… let’s discuss the Medicare Levy Surcharge.

The Medicare Levy Surcharge applies to singles who have a taxable income of over $90,000 and couples or families who have a combined income of more than $180,000 and do not have Private Hospital Cover.

If you earn over these thresholds, you will pay a levy at tax time for not having Private Hospital Cover, how much will you pay? That’s worked out as a percentage of your taxable income. Check out the table below which current thresholds:

MLS income thresholds for 2014–15, 2015–16, 2016–17 and 2017–18

What’s the good news you ask? By taking out any level of Private Hospital Cover you can avoid paying the levy all together and better yet: Health Deal is a free service to you so give us a call today on 1300 369 399 and we will work with you to ensure you and your family are in the best possible position at tax time. If you’re already sorted with your health insurance, call us anyway. The new financial year is a great reminder to review you and your family’s cover – we recommend doing so every twelve months.



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