CompareAll Business InsuranceCompare Business InsuranceOverseas Visitor CoverAll LoansCompare Loans
If you are under 30 there are three rules working for you. Funds may discount hospital premiums by up to 10% for people who join between 18 and 29. You may be able to stay on your parents' family policy until as late as 31. And as long as you hold hospital cover by the 1 July after your 31st birthday, you never pay Lifetime Health Cover loading.
The other side of the ledger is the Medicare Levy Surcharge: once your income is above the singles threshold ($105,000 in 2026–27) and you are no longer covered as someone's dependant, going without hospital cover costs you at tax time.
By Better Rate Mate Editorial Team · Last reviewed
Since 1 April 2019, insurers have had the option to discount hospital premiums for people aged 18 to 29. The maximum is 2% for each year you are under 30 when you take out a policy offering the discount, up to 10% for 18 to 25 year olds. You keep the discount until you turn 41, then it reduces by 2% each year until it reaches zero.
It is optional, so not every fund or every policy offers it; ask before you buy. It applies to hospital cover only, not extras. If you move to another policy or fund, the new insurer decides whether to honour your existing discount, so confirm before you switch. On a couples policy the two discounts are averaged.
| Your age when you first took a policy offering the discount | Maximum discount the insurer may offer |
|---|---|
| 18 to 25 | 10% |
| 26 | 8% |
| 27 | 6% |
| 28 | 4% |
| 29 | 2% |
| 30 or older | 0% |
Reforms passed in June 2021 let funds keep adult dependants on family policies up to 31. Each fund chooses its own limit within that, and many charge more for adult dependants through an extended family option. You stop being a dependant if you marry or enter a de facto relationship.
You cannot have both: the age-based discount does not apply while you are covered as a dependant. And for the Medicare Levy Surcharge, a dependant on a family hospital policy is not liable for the surcharge as long as they have no spouse or dependants of their own.
Lifetime Health Cover loading adds 2% to your hospital premium for every year you are over 30 when you first take out hospital cover, counted from the 1 July after your 31st birthday. It is capped at 70% and only drops off after ten years of continuous cover. Holding any hospital policy on that date, even Basic, avoids it. Once you hold cover on or after that date, you also get up to 1,094 days without cover over your lifetime before a loading starts, which can absorb a gap between jobs or a period travelling.
If you are not covered as a dependant and your income for surcharge purposes goes above $105,000 (2026–27), you pay a surcharge of 1% to 1.5% of that income unless you hold hospital cover with an excess of no more than $750. For many people in their twenties, the first pay rise over the threshold is the moment a hospital policy starts paying for itself.
| Income for MLS purposes | Singles | Couples and families | Surcharge without hospital cover |
|---|---|---|---|
| Base tier | $105,000 or less | $210,000 or less | 0% |
| Tier 1 | $105,001 to $123,000 | $210,001 to $246,000 | 1.0% |
| Tier 2 | $123,001 to $164,000 | $246,001 to $328,000 | 1.25% |
| Tier 3 | $164,001 or more | $328,001 or more | 1.5% |
The cheapest hospital cover that satisfies the surcharge and Lifetime Health Cover is Basic, but Basic covers very little. If you play contact or high-impact sport, Bronze is the practical minimum, because it must cover joint reconstructions (torn ligaments and tendons) and bone, joint and muscle. If you might start a family or pursue IVF in the next few years, pregnancy and assisted reproduction are only guaranteed on Gold, with waits of up to 12 months, so it pays to plan ahead. Extras are worth it only if you will actually claim more than you pay.
Whatever you choose, compare policies by their Private Health Information Statement, which lists the categories covered, the excess and the waiting periods in a standard format.
It can be. Joining before 30 can earn an age-based discount of up to 10% where offered, joining before the 1 July after your 31st birthday avoids Lifetime Health Cover loading, and if you earn above $105,000 (2026–27) it avoids the surcharge. If none of those apply, it comes down to whether you want private cover for procedures such as sports injuries.
Insurers may discount hospital premiums by 2% for each year you are under 30 when you join a policy offering the discount, up to 10% for ages 18 to 25. You keep it until 41, when it phases out by 2% a year.
Yes, while you meet your fund's dependant rules. Funds can now cover adult dependants up to 31, but each sets its own limit, and you stop being a dependant if you marry or enter a de facto relationship.
A Basic or Bronze hospital policy with a higher excess and the age-based discount is usually the cheapest cover that counts for the surcharge and Lifetime Health Cover. We do not quote prices because funds change them every 1 April.
Medicare Levy Surcharge thresholds and government rebate percentages are reviewed regularly, so this page does not quote them. For the current figures see the ATO and the government's privatehealth.gov.au.
