How private health insurance can help with the Medicare Levy Surcharge 

In Australia we are lucky to have a robust public healthcare system provided through Medicare. To help fund Medicare, most taxpayers will pay a 2% compulsory Medicare Levy each year regardless of income.   

However, there is an additional tax that higher-income earners (earning over $97,000 as a single or $194,000 as a couple) need to consider – this is called the Medicare Levy Surcharge (MLS).  

Let’s uncover what the MLS is and how private health insurance might help reduce this surcharge. 

What is the Medicare Levy Surcharge (MLS)? 

According to Private Healthcare Australia, the Medicare Levy Surcharge is an extra levy designed to encourage high-income earners to take out private hospital cover, reducing the burden on the public health system. It applies to individuals and families who do not have an appropriate level of private hospital cover and earn above a certain income threshold. The surcharge ranges from 1% to 1.5% of your income, depending on your earnings.  

The income thresholds and rates applicable for the period of 1 July 2024 to 30 June 2025* are: 


$97,000 or less 

$97,001 – $113,000 

$113,001 – $151,000 

$151,001 + 


$194,000 or less 

$194,001 – $226,000 

$226,001 – $302,000 

$302,001 + 

Medicare Levy Surcharge 






How does having private health insurance help reduce the Medicare Levy Surcharge? 

When you purchase an appropriate level of private hospital cover, you are exempt from the Medicare Levy Surcharge. This means that instead of paying an additional levy, your money can go towards health insurance that provides you with additional benefits and peace of mind.  

For instance, if you are a single individual earning a high-income salary of $114,000 per year, the Medicare Levy Surcharge you would owe at tax time amounts to $1,425. You could purchase Latrobe Health’s Healthy Start hospital cover with basic extras, totalling $1,551 annually**. This choice not only provides you with peace of mind through accidental hospital cover but also exempts you from additional tax payments. Plus, you gain access to excellent extra benefits that can be used for dental, optical, and massages, potentially leading to increased savings. 

Likewise, as a young couple with no dependents earning a high-income salary of $230,000 per year combined, the Medicare Levy Surcharge would be $2,875. Instead, you could opt for award-winning private hospital coverage by choosing Latrobe Health’s Bronze Hospital 750 cover for $2,805.52 annually**. 

When considering private health insurance, Latrobe Health Services is great choice! 

As a not-for-profit health fund, Latrobe Health Services reinvests its profits back into the fund to improve services and benefits for members. This commitment ensures that your contributions are used to enhance the quality of services available to you, rather than generating profits for shareholders. Your contribution also helps to fund health related initiatives such as a partnership with Shane Warne Legacy bringing health awareness and heart checks to Aussie communities.   

Speak to Latrobe Health Services today to find a cover that suits you and have peace of mind that you are covered when you need to be. 



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Advice in this article is general in nature and doesn’t consider your specific circumstances and may not be suitable to you. Please consider your financial and health requirements before making decisions.  

** Costs of health cover options are based on Australian Government rebates of 16.41% and do not take into consideration any Lifetime health cover loading fees or Age Based discounts. They are general in nature and subject to change. To view your exact costs, get a quote today, or speak with one of our friendly consultants.  

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