If you are serving in the permanent forces or you are a reservist on Continuous Full-Time Service (CFTS), your situation is a little different from most Australians when it comes to private health insurance.
While you are serving full-time in the ADF, Defence generally covers your medical needs. Because of this:
You typically do not pay the Medicare Levy, and
You may not need private health insurance for yourself.
However, if you have a partner or family, their circumstances may be different. They rely on the civilian health system and may choose to have private health insurance to cover medical costs not fully covered by Medicare.
What Private Health Insurance Covers
Private health insurance can provide access to services beyond what Medicare offers.
Depending on the level of cover, it may include:
Treatment in a private hospital
The ability to choose your own doctor
Shorter waiting times for some procedures
Extras cover, such as:
Dental
Optical
Physiotherapy
Other allied health services
Generally speaking, the more services your policy covers, the higher the premium will be.
The Medicare Levy Surcharge
Even if you personally don’t need private health insurance while serving, the Medicare Levy Surcharge (MLS) may still apply in some situations.
You may need to pay the surcharge if:
You are single and earn more than $90,000, or
Your family income is more than $180,000,
and you do not have private hospital cover.
The surcharge can be up to 1.5% of your income, and it is in addition to the standard 2% Medicare Levy.
If you have dependants, the rules can be more complex and you may still be liable under certain conditions.
Thinking About Your Future Needs
When deciding whether private health insurance is right for you or your family, it helps to think about:
Your current health needs
Your family’s medical needs
Your future plans, especially if you expect to leave Defence in the coming years
Private health insurance decisions often become more important when transitioning to civilian life, when Defence medical support no longer applies.
Lifetime Health Cover Loading (LHC)
If you delay taking out private hospital cover, you may face the Lifetime Health Cover Loading.
This loading increases your premiums by 2% for every year after age 30 that you do not have private hospital cover.
For example:
If you first take out cover at age 35, you may pay 10% more in premiums.
There are special rules for ADF members who discharge after age 30, which may reduce or remove the loading depending on your circumstances.
For more information, visit the Australian Government’s Private Health Insurance website.
The Bottom Line
While serving in the ADF, you may not need private health insurance for yourself. However, it can still be worth considering if:
You have a partner or family,
Your income may trigger the Medicare Levy Surcharge, or
You are planning for life after Defence.
Taking time to understand your options now can help you make better financial and healthcare decisions in the future.