The cheapest way to avoid the Medicare levy surcharge.
Earn more than $105,000 as a single, or $210,000 as a couple or family, and you pay up to 1.5% more tax unless you hold hospital cover. Put in your details to set the surcharge against the cheapest policy that removes it, from every policy insurers have filed. It uses the 2026-27 thresholds and the October 2026 policy data.
Taxable income plus reportable fringe benefits and super contributions.
- BaseUp to $105,000Surcharge NoneRebate 24.1%
- Tier 1, your income$105,001 to $123,000Surcharge 1%Rebate 16.1%
- Tier 2$123,001 to $164,000Surcharge 1.25%Rebate 8.0%
- Tier 3Over $164,000Surcharge 1.5%Rebate 0.0%
The rebate shown is for the age you've entered.
Surcharge without hospital cover
$1,200 a year
1% of $120,000.
Cheapest exempt policy, after the rebate
$1,033a year
ahm, ambulance hospital (basic), Basic, $750 excess: $102.60 a month, $1,231 a year, less a 16.1% rebate.
- Surcharge without cover$1,200
- Cheapest exempt policyafter the rebate$1,033
- The same policywith a 10% loading$1,156
The policy costs $167 a year less than the surcharge, and comes with hospital cover.
If no one on the policy has held hospital cover since turning 31, a Lifetime Health Cover loading of 10% applies to the premium, and the rebate does not reduce it: about $1,156 a year.
The cheapest hospital-only policy anyone can buy in your state that its insurer files as exempting you from the surcharge, at whatever excess makes it cheapest. Cheapest is not best: these policies cover little beyond accidents and the minimum every policy must include. For tier, extras and excess trade-offs use the health insurance comparison calculator.
The cheapest exempt hospital policy, by state and cover
Each state's cheapest policy that removes the surcharge, for a single, a couple, a family or a single parent, a month before the rebate. More choice, including higher tiers and lower excesses, is in the hospital cover explorer.
Monthly, before the rebate.
The same four income tiers set the surcharge and the rebate
The higher your income, the more surcharge you pay without hospital cover, and the less the government rebate takes off a policy. Above the top threshold there is no rebate at all.
| Tier | Single income | Family income | Surcharge | Rebate, under 65 | 65 to 69 | 70 and over |
|---|---|---|---|---|---|---|
| Base | Up to $105,000 | Up to $210,000 | None | 24.1% | 28.1% | 32.2% |
| Tier 1 | $105,001 to $123,000 | $210,001 to $246,000 | 1% | 16.1% | 20.1% | 24.1% |
| Tier 2 | $123,001 to $164,000 | $246,001 to $328,000 | 1.25% | 8.0% | 12.1% | 16.1% |
| Tier 3 | Over $164,000 | Over $328,000 | 1.5% | 0.0% | 0.0% | 0.0% |
Family thresholds apply to couples and single parents and rise by $1,500 for each dependent child after the first. The surcharge is charged for each day of the year you go without eligible cover. Rebate percentages apply from 1 April 2026 and are set by the oldest person on the policy. Check your own position with the ATO before you decide.
Questions about the surcharge
- What is the Medicare levy surcharge?
- An extra 1% to 1.5% of income that people above the thresholds pay on top of the 2% Medicare levy if they don't hold eligible private hospital cover. For 2026-27 it starts above $105,000 for singles and $210,000 for couples and families, and rises to 1.25% above $123,000 and 1.5% above $164,000 for singles.
- Is hospital cover cheaper than the surcharge?
- Often, just above the threshold. A single in New South Wales earning $110,000 pays a $1,100 surcharge without cover. The cheapest exempt policy in the October 2026 data, ahm's ambulance hospital (basic), costs $1,231 a year before the rebate and about $1,033 after it, for an under-65. Higher incomes pay a bigger surcharge and get a smaller rebate, so the gap moves; the calculator works it through.
- What is the cheapest policy that avoids the surcharge?
- For a single, ahm's ambulance hospital (basic) in the Northern Territory at $39.30 a month before the rebate (Basic, $750 excess), among policies anyone can buy in the October 2026 data. The table on this page has the cheapest in every state for singles, couples, families and single parents.
- Does extras cover count?
- No. Only hospital cover exempts you. A combined policy counts because it includes hospital cover; an extras-only policy does not, however comprehensive.
- What counts as income for the surcharge?
- Broadly, your taxable income plus reportable fringe benefits, reportable super contributions and net investment losses; the ATO's definition is the one that counts. Couples and single parents use their combined family income against the family thresholds, which rise by $1,500 for each dependent child after the first.
- What about the Lifetime Health Cover loading?
- If you take out hospital cover after the 1 July following your 31st birthday, the hospital premium carries a loading of 2% for every year you were over 30, up to 70%, until you have held cover for ten continuous years. The government rebate does not reduce the loading. The calculator shows it for your age.
Source: PrivateHealth.gov.au data (Private Health Insurance Ombudsman) via data.gov.au, licensed CC BY 3.0 AU. Normalised by The Finance Algorithm from the extract dated 1 Oct 2026, read on 23 Oct 2026.
Premiums are monthly and shown before the Australian Government rebate and any Lifetime Health Cover loading or age-based discount. Confirm the price and the cover with the insurer before you buy; the official statement for every policy is on PrivateHealth.gov.au. This is general information, not advice, and no insurer pays to be listed or ranked here.