Health Insurance & EOFY: What You Need To Know

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Sophie Ryan

Last Updated: 14th October 2022

June…  when cold weather really kicks in, and many young families gear up for yet another round of school holidays.  

It’s also the time of year when we say goodbye to the current year, and hello to a new one! 

For many of us this can mean thinking about our tax returns and sifting through that shoebox in the back of our wardrobes that’s over-flowing with receipts, right?  

It’s a time-consuming and tedious task combing through those work-related expenses, so much so many of us could be forgetting something else that’s a good idea to consider around this time of the year – and that’s private health insurance.  

If you already have private health cover, the end of financial year is a great time to compare from a range of policies and make sure you are still getting value for money.  

And for those without cover, it’s a good time to think about whether you should take it out, particularly if you are a higher income earner or about to turn 31.  

Read on to find out why.  

Confused about how private health insurance relates to tax? Let me help you out.  

You may have heard of the Medicare Levy Surcharge (or MLS). Let’s break down for those many Australians feeling confused.  

iSelect Commercial coordinator – Health, Hayley Crowden said the Medicare Levy Surcharge (MLS) is an additional tax designed to reduce the burden on our public health system.  

“It encourages those higher income earners to take out private health insurance,” Ms Crowden said.  

Singles with a taxable income over $90,000, who don’t hold an appropriate level of hospital cover pay an additional 1% tax, which increases to 1.25% for those earning over $105,000, and to 1.5% for those earning over $140,0001.

Couples and families with a combined taxable income of over $180,000 pay an additional 1% levy, which increases to 1.25% for those with an income over $210,000, and 1.5% if they have combined earnings of over $280,000 and don’t hold an appropriate level of hospital cover2. 

“Some higher-income earners may be able to find private hospital cover for a similar price to the additional tax they may be required to pay via the MLS. 

“In some instances, there may be very little cost difference between paying the additional tax or taking out a level of hospital cover which may provide significant benefit should you experience a health issue in the future,” Ms Crowden said.  

Now here’s one for the under 30s called Lifetime Health Cover (LHC) loading.  

“Unlike the Medicare Levy Surcharge, LHC loading is not a tax. It’s a government penalty designed to encourage younger and healthier Australians to take out private health insurance earlier in life,” Ms Crowden said.  

People who do not hold eligible hospital cover by July 1st following their 31st birthday, who decide to take it out later in life, will have to pay 2% LHC loading on top of their hospital premium for every year they were without cover, and pay it for 10 years. The maximum loading is 70%3.” 

Household budgets are tightening, so review more than just your private health insurance this EOFY

According to the Consumer Price Index (CPI), Australia’s inflation rate increased by 5.1% in the 12 months to the March 2022 quarter4, and with further interest rate rises expected5, many Australian households are under increased financial pressure and are looking for ways to save.  

This makes the 2022 EOFY a great time to review all of your household expenses to find out if you could save or find better value, such as your energy bills.  

iSelect Commercial Manager – Energy, Scott Star said many customers may be paying more than they need to on their power bills, especially those who have been on the same plan for a while.  

“We know times are really tough for many Aussies, which is why we’re encouraging people to compare energy plans. You could find another option that delivers ongoing savings.” 

“Don’t pay more than you need to. Talk to iSelect* and we’ll try and help you out,” Mr Star said.  


1Medicare Levy Surcharge (

2Medicare Levy Surcharge (

3Lifetime health cover | Australian Taxation Office (



Sophie Ryan

iSelect Spokesperson

Sophie Ryan is an experienced journalist and iSelect spokesperson. She’s passionate about helping Australians to save time, effort and money.
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*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect will be available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. To view iSelect range of providers, visit: