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Can I suspend my health insurance policy?

Why would I pause my policy instead of cancelling?

What are the tax implications of suspending my health insurance?

When might I need to pause my policy?

Am I serving waiting periods if my policy’s paused?

Am I eligible to suspend my policy?

Frequently asked questions

Need a break from your health insurance?

Long story short

Pausing your health insurance could save you money

Taking a break from your policy means no premiums, but you won’t be covered while it’s on hold.

Be careful of potential extra costs for having no cover

If you exceed income thresholds, pausing your cover could mean paying the Medicare Levy Surcharge – even if you’re overseas.

When the suspension ends, you resume where you left off

There’s no need to re-serve waiting periods, and you can access the same benefits you had before pausing the policy.

Eligibility depends on your health fund’s rules

Most funds require 12 months of membership, up-to-date payments and advance notice to hit pause.

Can I suspend my health insurance policy?

Yes, you can pause your policy for a variety of reasons, like extended travel overseas. However, you’ll need to meet your health fund’s conditions, like being up to date with your premiums and having had your cover for at least 12 months. Each fund has their own suspension criteria, though.

Why would I pause my policy instead of cancelling?

Suspending your health cover rather than cancelling your policy means your waiting periods won’t reset and your time without cover won’t count towards your Lifetime Health Cover loading. However, suspending your policy doesn’t protect you from the Medicare Levy Surcharge, and the suspension can’t be indefinite.

Pros of pausing health insurance

• Your waiting periods don’t reset: If you pause and then resume your policy, you won’t have to re-serve waiting periods. If you’re partway through a waiting period, you’ll start back where you left off.
• Your benefits stay: If you’ve served all your waiting periods, your current level of cover and benefit limits stay intact and can resume once you’re back.
• You won’t add to your Lifetime Health Cover (LHC) loading: LHC loading is a charge added to your policy if you’re without hospital cover for more than 3 years after turning 30. But pausing your policy doesn’t count towards that 3 years’ worth of ‘days of absence’. That means you can take a break without worrying about extra costs later!

Cons of pausing health insurance

• You won’t have cover: While your policy’s on pause, you won’t be able to claim against your policy. It’ll be like you don’t have health insurance coverage. Although, if you’re outside of Australia where your cover can’t follow, this mightn’t be an issue.
• You could pay extra tax: As of 1 July 2026, if you earn over $105,000 (single income) or $210,000 (combined income) and you don’t have appropriate hospital cover, you’ll pay an extra 1–1.5% tax on your annual income as the Medicare Levy Surcharge for the days you didn’t have cover.
• You can’t suspend your policy for as long as you like: Suspension periods usually have a max limit of 1–2 years (although this can vary, so make sure you check with your fund). Then you’ll need to decide to reactivate your membership or end your policy.

What are the tax implications of suspending my health insurance?

Suspending your membership can mean you’ll need to pay the Medicare Levy Surcharge (MLS): an additional 1%–1.5% of your annual income in tax.

You’ll need to pay the MLS if:

• you earn over the threshold (as of 1 July 2026 that’s $105,000 for singles and $210,000 for couples and families)
• you don’t have hospital cover with an excess of $750 or less (singles) or $1,500 or less (families).

Unfortunately, if you put your health cover on hold, as far as the MLS is concerned, that means you’re not covered. So, you’ll be charged the MLS for whatever length of time your health cover isn’t active.

To dodge that surcharge, you’ll need to keep adequate private hospital cover – not extras cover – throughout the whole year.

When might I need to pause my policy?

You can choose to pause your health cover for lots of reasons, like you’re travelling overseas or experiencing financial hardship.

Some health funds accept different reasons for membership suspensions, including:

• travelling overseas
• financial hardship, including as a result of unemployment, parental leave or natural disasters
• imprisonment.

Depending on the reason and health insurer, there may be limits to how long you can pause your membership and when you can resume it.

Helpful tip

Make sure you know the ins and outs of your policy before pausing. A quick chat with your health fund or a squiz at your policy documents and fund information can help you avoid unexpected fees or losing your benefits.

And when you’ve successfully paused your health insurance, here’s a very simple yet pro move: mark the restart date in your calendar. Some funds usually require you to let them know when you’re back and ready to start your policy again, usually within 30 days of returning from overseas, for instance. Going past the deadline for payments could mean your policy is cancelled, and you might have to start from scratch with waiting periods and benefits – ouch.

Andres Gutierrez

General Manager – Health

Am I serving waiting periods if my policy’s paused?

When your policy is on hold, your waiting periods are, too. So, if you have another 5 months to serve for dental surgery before you press pause, you’ll have to pick up those 5 months right from where you stopped once you resume your policy.

Am I eligible to suspend my policy?

You’re eligible to suspend your health insurance policy if you meet your health fund’s eligibility requirements, like being up to date with your premiums.

Health funds can set their own rules about financial hardship suspensions and other policy suspensions, but it’s common to see eligibility requirements like:

• being a member of your health fund for 12 months or more
• having no overdue premiums
• letting your fund know in advance.

Frequently asked questions

Need a break from your health insurance?

A temporary financial hardship suspension is one way to save on health insurance, but it does mean you’ll be without cover for all intents and purposes. If you’d rather keep claiming but for a lower premium each month, you can try comparing policies instead to see if there’s a policy that offers you better value for money.

With iSelect, we make it easy to compare a range of policies from different health insurers. Simply call 1800 784 772 to speak with one of our friendly health insurance comparison experts or jump onto our online comparison tool.