Private health insurance rebates

26 May 2020

By Shadforth Financial Group

Private health insurance is available for all Australians who wish to cover the costs of being a private patient in hospital. Being a private patient means you have more control over the doctor who treats you in hospital and, in some instances, can reduce the waiting time for elective surgery by being treated in a private hospital.

Having private health insurance gives you peace of mind that when you need it you are covered for the best available medical treatment. Furthermore, if your income exceeds certain thresholds, by holding appropriate private hospital cover, you may also avoid paying the Medicare levy surcharge (MLS).

Private health insurance rebate

The private health insurance rebate was introduced as an incentive to take out private health insurance. It is calculated using percentage factors based on your income and age and is recalculated each year based on growth in the Consumer Price Index (CPI) and the industry-weighted average premium increase.

The table below shows the new rebate percentages in place until 2020-2021.

Note: the rebate does not apply to the Lifetime Health Cover loading applied to people who start cover after age 30.


1. If you are eligible for the private health insurance rebate, the effective cost of cover of private health insurance may increase for you and your family.

2. Before cancelling your insurance, you should weigh up the benefits provided by private health insurance to you and your family and compare it to the impact of the MLS if your income exceeds the thresholds. In some cases, the premiums may be cheaper than the extra MLS, however, even if the premiums are higher, the value of having private health insurance may outweigh any savings.

3. You should shop around and compare prices and deals to ensure you are paying for the cover you need. Take advantage of new packages or changes in pricing.

Educational guides