Can I Pause My Health Insurance?

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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 can 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 like the Medicare Levy Surcharge

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

When the suspension ends, you pick up right 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.

But it’s not as simple as letting your insurer know and saying, ‘See ya’! You’ll need to meet certain conditions, like being up to date with your premiums and having had your cover for at least 12 months.

Why would I pause my policy instead of cancelling?

Wondering whether you should take a breather or just cut ties completely? In most cases, suspending your health insurance policy is a smarter move than quitting cold turkey – although there are some things to consider.

Pros

• Waiting periods don’t reset: If you pause then resume your policy, you won’t have to re-serve waiting periods. 
• 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. 
• Avoid Lifetime Health Cover (LHC) loading: LHC loading is a charge added to your policy if you’re without hospital cover for more than three years after turning 30. But pausing your policy doesn’t count towards the three years. That means you can take a break without worrying about extra costs later! 

Cons

• No cover: While your policy’s on pause, you won’t be covered. 
• Tax implications: If you earn over $101,000, you might have to pay the Medicare Levy Surcharge during the suspension. 
• Limited time: Suspensions usually have a max limit of two years (although this can vary, so make sure you check with your fund). 

What are the tax implications of suspending my health insurance?

The devil is in the detail, and there’s some nitty-gritty about pausing your membership that could make the tax man do a double take. That nitty-gritty is the Medicare Levy Surcharge (MLS).  

The MLS is a tax you might need to pay if: 

• you earn over a certain amount (in 2025–26, $101,000 as a single or $202,000 as a family)
• 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 health cover ticking along throughout the whole year.

When might I need to pause my policy?

Many Aussies suspend their health insurance when they’re about to travel overseas or experiencing financial hardship. Just take a look at why some of our fictional friends have decided to do so. 

Amrita is off to Berlin for her dream job in tech and will be gone for more than a year. Because health insurance from home doesn’t cover her overseas, pausing her policy could save her a chunk of money.

Chris suddenly loses his job and isn’t sure how to stretch his budget to cover rent, groceries, and health insurance. Pausing his policy means he can keep his future cover without having to cancel and restart everything later.  

Some funds will even pause a policy for more unique reasons like imprisonment (though let’s hope you’re never in that boat).  

While some situations aren’t ideal, it’s a reminder that life throws up all sorts of curveballs. Sometimes pausing your health insurance cover is a sensible move until things settle down.

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 brochures 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? 

If you’re hoping a six-month pause will fly by and you’ll sneakily serve waiting periods at the same time – sorry, but that’s not how it works!  

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

Am I eligible to suspend my policy?

Every health fund has its own playbook, but most of them follow a pretty similar set of rules.

You’ve been with your fund for at least a year

Health funds like a bit of commitment. If you’ve been a member for 12 months or more, you’re usually good to go. It’s like proving you’re a loyal customer before they cut you some slack. 

Your payments are up to date

No free rides here! If you’ve got any overdue premiums, you’ll need to settle up before you can hit pause. Think of it as clearing your tab before taking a break. 

You apply before you need the pause

Timing is everything. You can’t just stop paying and hope for the best. You’ll need to let your fund know in advance – kind of like giving notice before you take leave from work. If you’re heading overseas, for example, you’ll need to show them your travel dates – yes, including when you’ll head back (if you have a return date at the time of application). 

Frequently asked questions

Need a break from your health insurance?

If you’re thinking of giving your health insurance a timeout, it’s a good idea to run your eye over the terms with your fund. It might save you a fair chunk without losing your cover’s perks.

Now, we know suspending (nor cancelling) your health insurance isn’t always the answer. Sometimes, shopping around can help you find adequate cover that feels right.

If you’d like to compare health insurance, we can help! You can explore policies easily online or give us a ring on 1800 784 772 if you prefer to chat with our friendly team.