When Is It Time to Get Private Health Insurance?

I'm 22 years old and still at University for a few more months, but recently started a new job in April that pays $110-120k per annum. I'm on my parent's private health insurance plan with HCF and I believe the only time I have actually used this cover is when getting a free dental clean/checkup twice a year. I used the ATOs Medicare Levy Calculator to get an estimate of $2,300 when inputting my new salary.

At what point does it make financial sense to get my own private health insurance? ASAP, or wait a few more months until the next financial year starts?
Or perhaps I should wait until I'm closer to the Lifetime Health Cover Loading limit (31 years old)?
Is a basic private health insurance plan more or less than the Medicare Levy?

I'm really interested in hearing the OzBaragin Community's thoughts and insights on the best way to approach Private Insurance in Australia.

EDIT: For anyone else seeing this post and asking themselves the same question, check out Do I Need Health Insurance

Poll Options

  • 16
    Get Private Health Insurance ASAP
  • 8
    Get Private Health Insurance in the new Financial Year (July 2021)
  • 79
    Wait until I'm older but before the Lifetime Health Cover Loading kicks in (31 years old)
  • 59
    Don't get Private Health Insurance
  • 1


  • +7 votes

    Is that $2.3k from the ML calculator ML or MLS (Medicare Levy Surcharge)?

    You pay MLS if you exceed an income amount and don't have private health.

    You pay ML regardless of whether you have private health or not.


      That's a great point, I didn't realise they were different things until you pointed it out. Thankyou!
      Looks like while the Medicare Levy is $2,300, the Surcharge would only be around $1,300.

      • +2 votes

        Welcome to the real world where governments find ways to scam the population ;)

        1.3k is now where you need to shop around for the BARE BASIC hospital cover. Any plans under 1.3k and that's money in your pocket :)

        If you need extra's look at how much it'll cost you out of pocket and do a cost vs benefit on excel.

        You've mentioned you got a family cover. I would suggest asking a tax agent about that and whether you'll be covered under them cause if that's the case, you've saved yourself a lot of time and 1.3k.

        Personally being young and also earning around your range, I had to look into this and found that for me AHM was the best. I went with basic hospital cover and basic extra for Dental which saved me more money, and still under the threshold which would your extra ML surcharge.

        (Sidenote: Got angry at the government in the process as they basically don't cover you for anything. You pay 900 dollars a year for nothing that increases every year by 1-2% — and in VIC you also pay ambulance cover separately — so f*** all).

  • +4 votes

    like all insurance; you need it when you need it
    do you undertake risky and/or contact sports?
    do you cycle on public roads?
    waiting for public knee recon etc is not something I would want
    it's not just a financial decision re tax

    • +6 votes

      health insurance isn't the same…
      We still have a good public system in Australia, it's just called wait a while.


      What does it do other than push you ahead of the queue?


        choice; doctor and location

  • +35 votes

    Stay on your parent's coverage for as long as possible.
    Only get the bare minimum Private health imho to reduce the tax paid above $90,000 unless you have a family.

    It's literally a scheme constructed by Private health insurance lobbyists in cahoots with the liberals to get people to subsidise the existence of the private health industry so they can afford to pay out large benefits to those that need it (older pensioners).
    You're paying double for essentially coverage you've paid for in your taxes already.


    • +2 votes

      Can't just be a rant if it's more informative and reasonable than what's in the news.

      Your rant is just facts.

      Likelihood of you needing your insurance is pretty low before 50 or 60 (haven't provided a definition of "pretty low" but bear with me).

      Paying from age 30 to 60 is just subsidising older people's healthcare (I'm not ideologically opposed to that, but from a bargaining perspective, one is likely to pay much, much more than they use (which I realise is very normal for insurance in general, but I'd characterise that as just "much more").

      You have your own dollar value to place on peace of mind.

      I self insure aka I'm an indoor cat.


    There are usually age-based discounts that encourage you to take up a policy at a younger age. NIB for example has this:

    Do I get any discounts for taking out health cover while I’m young?

    • If you’re under 30, the answer is yes. nib members aged between 18-29 receive discounts of up to 10% off their Hospital cover premium.

    • The age-based discount means that eligible members receive a 2% discount for every year they’re aged less than 30, up to a maximum of 10% for those aged 18-25. And the best part is, if they remain on an age-based discount policy, they’ll retain that discounted rate until they turn 41, where it will then be gradually phased out at a rate of 2% per year.

    For younger people, a basic cover is all you need, unless you can find a very good deal on a insurance policy. But typically the premiums increase after a while and you may want to switch providers to find a cheaper offer.

    I personally would wait until you get booted off your parents' insurance policies. Typically speaking this happens when you graduate from university (and start to work full time.


    When the cancel Medicare.

  • +2 votes

    HCF has family policies that cover adult children.

    Adult children are covered up to age 22 and up to age 25 if full-time students.

    Check you are cover'd.


      Looks like I'll no longer be eligible once I graduate, as I'm a full-time student for a few more months.

  • +1 vote

    I stayed under my parents policy til I was 25, meant I saved a bunch of money


      Haha but did they save money too?

      Or did it kinda merge with those earlier 2 decades where you also spent little money while they usually picked up the tab?

  • +1 vote

      So would that be right now? Or once I graduate and am no longer eligible for my parents plan?


        i reckon it should be when you are no longer eligible for your parents plan. and you should consider calculating using your taxable income to estimate, not your gross income.


    Is it still worth it to get private health over 31 if your income is not over the threshold? I'm not working for a few years but once I do, we will most likely be over the 180k mark, I figured the few percent loading is still cheaper than a plan we won't use for a few years


      i'm also just at threshold. For us i think, the surcharge what ever is like $1300, and the most reasonable family plan i could find was like 2500 (3 of us). So, a bit unlikely to get it until our income hits about 200k.

  • +22 votes

    Humblebrag post about getting an excessively huge salary right out of university. Doing what exactly, I wonder, and for whom.

    • +2 votes

      My bet is FIFO or is an IT Programmer.
      Doctors and lawyers would start on ~$80k

      • +2 votes

        Straight out of uni and doing a software engineer job on that salary isn't unheard of , but it's not the norm. You'd start as a junior and go from there. Must be some specialist thing, but how you get a specialist role with literally zero experience is beyond me.

      • +4 votes

        Most lawyers start out on about 60k (including super). Those in larger firms (aka mid and top tiers) can earn up to 80k (including super) as graduates, but given the hours worked would be lucky to be effectively making more than $30 an hour.

        • +1 vote

          That is if you can get into a decent firm or government. Some smaller suburban firms seem to get away with paying closer to 40 - 50k given supply and demand…


            @PugHugger: yeah but from what i've seen few of the suburban practices could really afford to pay much more.

            I agree with Shiny Mew, 60 is a more accurate starting range. I think you'd only regularly be seeing 80ish in Sydney, where they pay about 5-10k premium.

    • +6 votes

      also interested on what OP is doing to get that salary right out of uni


        There's maybe around 50-80 corporate positions (rough estimate from when I was applying 2 years ago) each year which pay around 100K+ as a grad in Sydney.
        I'm just going to give a brain dump in no particular order.

        The most obvious ones that everyone talks about at uni

        Management consulting (top 3/boutique not the big 4) - Roughly 5-10 spots (some take 1 or 2 or none at all each year)
        Investment Banking - Roughly 5-10 spots across all the BB? (this is the one i have the least experience in)
        Institutional Banking - Roughly 5 or less
        Trading (Anything e.g. Quant, Software think of Optiver) - Unknown but not many
        Tech Sales in large software companies (AE) - 10-15 spots (turnover is very high and requires experience)

        The less obvious ones that no one really talks about

        Macq Bank (many roles) - 20-30 spots with the downside being stuck on the same salary with very little growth over the years doing mind numbing work e.g. Audit will pay 92K ish.
        Startups - 10? (wild guess but I had 3 offers above 100K)
        Experienced hire roles - Unknown but if you get enough experience under your belt in uni and skip the grad jobs altogether there are many >$100K jobs. I took this path and enjoyed it much more than the fast paced mentality of some high paying grad jobs (16 hour work days 7 days a week).

    • -2 votes

      "Bachelor of applied finance and a Bachelor of economics" as mentioned in a previous post. From my expereince graduate salaries are close to 60k not 120k. Maybe OP is dreaming…

    • +2 votes

      My guess: Investment banking - pretty standard salary but their hours are not ~ 80/week
      Also congrats OP! I'm sure it wasn't easy to get through those rounds. I see no brag. Just a lot of uninformed/jelly people :P

  • +1 vote

    You can stay on your parents insurance until you are 21 or 25 if you are studying.
    Once you get your job and start earning over 90k you'll need to pay 1% of your income (90k = $900) if you don't have your own PHI.

    PHI is a scam but unfortunately you need it if you don't want to get shafted by the tax man. Find a cover that gives you bare basics but also doesn't cost you more than the MLS will, but one that also gives you something for your money. No point paying $10-20 a week for absolutely nothing except a tax dodge.


      sorry to trouble you but you seem knowledgeable. If I get a barebones cover for say 700bucks, but medicare is telling me I owe 3k if i don't have cover. Do is still end up paying a surcharge of 3000-700, or do I get to pocket the difference?


    The good news are that there are still good covers for around $20 per week or less with an age based discount. You will also be covered without having a waiting period if anything should happen, I shop around and and get sign up offers and am usually on a bronze or bronze plus cover. I look for inclusions like cancer, plastic surgery if medically necessary, pain management, lung and chest. A few of them automatically give you rehab in the event of an accident by upgrading you to gold for 90 days.

  • +1 vote

    Just noticed this article in the ABC today. Probably doesnt answer your question specifically OP, but thought i'd post here in case it does help someone else



    Read up, but from memory the Medicare Levy is 1.5% and as such you can get cheaper health insurance than this and therefore you save money.

    To see what your levy would be check out the following page:

  • +1 vote

    The following website has a short quiz that you can fill in, and based on your answers, it will tell you whether it is worth getting private health cover.
    [DoINeedHealthInsurance] (https://www.doineedhealthinsurance.com.au/index.html)

    In general, if you earn above the threshold, it is worth getting a basic hospital cover as it will be cheaper than paying MLS.

    For your case, unless you have >90k income for the current financial year, I would not bother with getting a policy until the new financial year (1 July 2021). I would recommend getting on 1 July 2021 as you will be penalised for days where you do not have the appropriate cover.

    • +1 vote

      This was my understanding of it as well, thanks for confirming this!

  • +2 votes

      A great resource you and Ongy shared. Thanks!

  • +1 vote

    FWIW, the public health system in Australia is pretty good. There are certainly issues, but these are not issues that private health insurance will fix.

    Broadly speaking, the way that I see it is that "extras" cover can be pretty useful if you need it, e.g. if you need glasses, dental, physio…etc., depending on what you need, it's pretty easy to figure out if it's worth it. For example, I wear glasses and see the dentist every year, so extras cover for me makes sense.

    Hospital cover is a bit more questionable IMO. The main benefit that I can see is that it reduces waiting times for elective procedures if that's something that's important to you. Again, hard to judge in advance for what you may or may not need, but if you're generally healthy, then most of your medical issues are likely to be emergencies (get food poisoning, break an arm, get in a car accident…etc.) for which private health insurance won't make any difference.

    TL;DR, if you see the dentist and wear glasses or just want some ambulance cover, get extras. Personally I can't find the value in hospital cover, but I have friends who swear up and down by private consultant, so YMMV.

    Of course, there's the whole tax argument as well, but that's besides the point. If you get a tax savings by going with private, then go for it.

  • +1 vote

    In the years I've had private health the only times it has been useful has been dental (like most people) and 2 unexpected emergency surgeries.

    One covered about $300 with the rest covered by Medicare and another covered $2000 with no cover by Medicare.


    wait until you're 30 to get it (before lifetime health cover loading kicks in) and/or if you decide to start your own family before then

  • -1 vote

    Why the Flap we are subsidising PHI premiums and especially the self confessed Junk policies to reduce Tax

    Flapping wrong

  • +1 vote

    Probably wait a bit until lifetime loading kicks in, but also consider what you’d do if you get a minor to moderate injury requiring surgery, ie pay in full privately or sit on a public waiting list, which could put you off work for a while.

    If you do any sports that put you at risk of knee injuries and the like, eg soccer, netball, skiing, I’d consider getting private health insurance. Also if you have any significant mental health or substance abuse risks, consider private health that includes mental health/ drug and alcohol admissions - private is much nicer and more available than public for this.

    Private health insurance is really about hospital care, not the extras. Surgeries/admissions cost in the thousands, so without private insurance it’s best to have money put aside for this, so as not to end up on a public waiting list.

    If you do get hospital cover, make sure it includes what you need, some policies are hardly worth having- pretty much include nothing. The common things young people need are orthopaedic surgery, mental health admissions, general surgery etc. Also physical rehabilitation from traumatic injuries is not super uncommon but if you’re bad enough to need this the public system will be fine. It’s more things like busting your ACL, or damaging your cartilage where private insurance comes in handy.

  • +1 vote

    I wouldn't even worry about the lifetime loading, a couple of years not paying insurance cancels it out.

    • +2 votes

      That's what I thought, paying 20% extra for a few years would be worth saving $700+ a year for a plan you don't use

    • +1 vote

      My mum didn't get PHI until she was 60. Even with the LHC penalty added to her premium, she was still tens of thousands ahead.


    When you no longer can be on your parent's cover

  • +1 vote

    Curious to know which field is paying $120k for grad? might be time for a career change

  • +1 vote

    What jobs pays 120k for a 22 year old?


      Good ones.


    My mate works as an IB, fresh out of uni they were on $100k + $70k bonus if you hit your targets. $120k/year out of uni isn't unheard of. I can name multiple companies/positions that would get this easily.


      What are the working conditions like? If its 80hour per week then you're literally on 50k p/a


        The IB job definitely isn't 9 to 5 but also not 80 hour weeks. The other jobs are pretty damn close to 9 to 5 except when close to deadlines, like any other decently paying job really.


          whats other jobs?


            @Homr: Software eng and chemical eng at the big oil/miners. FIFO Geologists at the miners. Mainly mining/oil


              @nurries: they pay 120k with 9-5 hours?

              • +1 vote

                @Homr: Grad engineers were about $100k + shares + bonus when I was a grad. Roughly 9 to 5. Obviously some periods are busier than others.

                FIFO depends on how good your roster is. I'm not too across FIFO but I think 2/1 is your gold standard.

  • +1 vote

    Damn, well done on the great job salary!

  • +1 vote

    I'll save you the discussion, yes you need PI bare basic hospital cover just to not pay the surcharge as long as it's under 1% of your income (pocket the difference) if you're in Qld go with Westfund (900$ish annual)

  • +1 vote

    No need for private health insurance in this country in my opinion as I had one for last 12 years and regret it.

    I pay around $500 per month but every time I have to see specialist then private health insurance pays nothing… Or if I do MRI then it pays nothing.

    Now when you hospitalised then they pay based on gap between Medicare rates. So if you use cardiologist and he charge you say $1000 for attended then Medicare might pay $300 so the health fund supposed to pay $700 but instead they will only pay $30 because Medicare schedule charges for cardiologist are $330 and Medicare paid $300 so private insurance will only pay for $330-$300 =$30..! And you will pay remaining $1000-$330=$670… !!!

    Best is to put aside $500 month in savings account and only use that fund when you need for medical purpose..!

    If you ever loose your job then health insurance won't give you 12 months of payment hold time.. they will cancel it and you will loose waiting time you had..!

    Good luck this is just my opinion based on my experience… !


    Guys, I don't know if is better opening a new topic or I can ask here.

    I ll be on my 90k plus super soon (30yo) Is better get a private insurance even if I won't use it? To avoid Medicare levy surcharge. What would be the difference regarding taxis? I read a bit and looks better get the basic one is it right?



      This is what everyone who has basic/hospital only for tax purposes does. They pay for an eligeble health "insurance" product that deems them exempt from the 1-1.5% MLS.

      In your case, 90k = 1% MLS = $900
      Find an annual insurance less than 900 and you pocket that difference.