Private health insurance rebate

The private health insurance rebate is an amount the government contributes towards the cost of your private health insurance premiums.

The rebate is income tested which means your eligibility to receive it depends on your income for surcharge purposes. If you have a higher income, your rebate entitlement may be reduced, or you may not be entitled to any rebate at all.

The rebate can be claimed for premiums paid for a private health insurance policy that provides private patient hospital cover, general cover (commonly known as extras), or combined hospital and general cover. The government does not give this rebate on the lifetime health cover loading component of a policy.

If you, your spouse and dependent children don't have an appropriate level of private patient hospital cover, and your income for Medicare levy surcharge (MLS) purposes is above a certain threshold, you may be required to pay the MLS. The rate of MLS depends on your income for MLS purposes. This applies unless you (and your dependents if you have them) are exempt from paying the Medicare levy.

You can claim the private health insurance rebate as a reduction in the amount of private health insurance premiums you pay to your insurer. Alternatively, we will calculate your private health insurance rebate when you lodge your tax return. This rebate is a refundable tax offset.

The rebate percentage is adjusted on 1 April each year.

Appropriate level of private patient hospital cover

Private patient hospital cover is provided by registered health insurers for hospital treatment provided in an Australian hospital or day hospital. You must arrange and pay for your cover directly with the insurer.

For singles, an appropriate level of cover must have an excess of $750 or less. Couples or families must have an excess of $1,500 or less.

If your private health insurance policy doesn't provide an appropriate level of private patient hospital cover, and your income for MLS purposes is above a certain threshold, you may have to pay the MLS.

General cover, commonly known as 'extras', is not private patient hospital cover. It covers items such as optical, dental, physiotherapy or chiropractic treatment.

Travel insurance is not private patient hospital cover for the purposes of the MLS. Similarly, private patient hospital cover does not include cover provided by an overseas fund.