What is the Medicare Levy Surcharge?

Jun 13, 2018 | Health, Insurance

What is the Medicare Levy Surcharge (MLS)?

Australia requires its citizens to pay for a Medicare Levy Surcharge (MLS). This is imposed on people who do not have a private health cover and individuals who earn at least $77,000. The income threshold for young couples and families is set by the government at $154,000. For people who are looking for a way to save money, they can get a cover instead from Australian health insurance providers.

Paying for this type of insurance is a win-win solution for the insured. They get optimum medical benefits for themselves and for their loved ones, as well as save money by paying a smaller amount on taxes imposed by the government

How may the MLS affect me?

The initial surcharge is 1% and increases to a maximum of 1.5% of your income. Your income in a year will determine what MLS category you fall into and the surcharge applied.

The Medicare levy surcharge calculator works every day. This means if you take out private hospital cover in the middle of the year, it is a must you pay the MLS for the remaining part of the year.

You can buy a basic level of hospital cover and enjoy all the benefits for around the same price or less than what you’d be charged an additional tax.

Who is liable to pay the surcharge?

If your income exceeds the relevant income threshold and you do not have an appropriate level of private patient hospital cover for the full year, you will be liable to pay the surcharge. The income threshold that the surcharge kicks-in at changes depending on whether you are single or have dependants:

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How to avoid the Medicare Levy Surcharge

In order to avoid the surcharge, you must have the appropriate level of cover. For singles, that means a policy with an excess of $500 or less. For couples or families, it means an excess of $1,000 or less.

Cover for ‘extras’, such as optical, dental, physiotherapy or chiropractic treatment, is not private patient hospital cover.  Buying cover for those items only will not exempt you from the surcharge.

Benefits of private health cover

Private medical insurance used to be the seen as a luxury and with Medicare offering free, comprehensive health care for all why bother paying a monthly premium more or less for the same service? Think again!

Despite setting a target that patients should have to wait no more than 18 weeks for treatment, Medicare is still plagued by lengthy waiting times that can, unfortunately, mean the difference between life and death for some people. With private medical cover, patients can be booked into routine or complicated operations in around two weeks. At the same time, private patients can choose to have their treatment at a time and date to suit them meaning they are no longer at the mercy of when the public system can squeeze them in.

Private medical cover prides itself on high standards so it’s no surprise that hospitals are routinely checked and scrutinised to make sure they are not only providing the very best level of care but also that they meet the latest hygiene and safety standards. Patients with private medical insurance can not only choose which hospital they would like to go to but can also request in-depth information about the services provided so they can make an informed decision first time and every time.

Lastly, private medical insurance offers patients a high standard of care on the little things and as well provides a first class and quick service. For instance, private patients can benefits from personal en-suite bathrooms while other patients will share a bathroom. This allows you to relax and recoup in your own private surroundings and stops the spread of germs. Patient choice is high up on the private health care agenda meaning food prepared in the hospital is tailored to peoples likes and dislikes, families can visit and stay over and people have the freedom to decide which medical staff they would like to attend to them.

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The possibility to save on tax (Medicare Levy Surcharge) or additional lifetime health cover charges (Life Time Health Cover Loading) for those people affected is often a compelling reason to purchase health insurance, why not check out what low rates you can get now!?