If you are a member of the permanent forces, or a reservist on continuous full-time service (CFTS), generally you do not pay the Medicare levy and may not need private health insurance, as Defence covers all your medical needs. However if you have a partner and/or family they may want private health insurance to cover medical costs not covered by Medicare.

Private health insurance

Private health insurance covers a range of services not covered by Medicare, for example, a private hospital and the doctor of your choice, as well as ancillary services such as dental, optical and physio.

If you are single and earn over $90,000 or a family earning more than $180,000 and you do not have private hospital cover you may have to pay an additional Medicare levy surcharge of up to 1.5%. This is in addition to the standard 2% Medicare levy. If you have dependents, you may still be liable for the Medicare levy surcharge under certain conditions, see PACMAN tax alerts.

When considering private health insurance, think about your cover needs, now and in the future. Generally, the more you are covered for, the higher the premium.

If you wait too long to take out private health insurance you’ll pay the Lifetime Health Cover Loading (LHC). This increases your premiums by an extra 2% for every year after age 30 that you haven’t had private hospital cover. There are special conditions that apply to full time ADF members who discharge after age 30. For more information, visit the Government’s Private Health website