If you’re under 30, there are several reasons you might consider taking out private health insurance. Whether it’s your first policy, you’re leaving a parent’s plan or you want to avoid paying higher premiums, getting insured early can help you access the treatment you need and save money in the long run.
Health insurance scenarios for under 30s
Taking out health insurance before 30 can make sense in a number of situations:
- Getting your first policy: if you don’t have any health cover at all, taking out a policy can provide protection against unexpected medical costs.
Even basic hospital or extras cover can help manage bills you might otherwise have to pay yourself. Starting early also helps you build a record of continuous cover, which can keep premiums lower in the future.
- Leaving a parent’s policy: many young adults rely on their parents’ cover, but while government rules allow dependants to remain on the policy up to age 31, some funds remove coverage as early as 25.
Checking how long you can remain on a family plan and arranging your own cover in advance ensures you don’t have a gap, which could be costly if you need treatment.
- Avoiding Lifetime Health Cover (LHC) loading: LHC loading is a government measure that increases private hospital premiums if you don’t take out hospital cover before your 31st birthday.
The loading increases by 2% for each year you are over 31 when you first take out cover, up to a maximum of 70%, and remains in place for ten years. Taking out hospital cover before age 31 (and maintaining it) helps you avoid these additional costs.
- Earning above the Medicare Levy Surcharge (MLS) threshold: if your income exceeds a certain level – above $101,000 for singles in 2025–26 – you may have to pay additional tax through the MLS. However, you can avoid the surcharge by taking out an appropriate level of private hospital cover.
"Although I knew about the health insurance discounts available for taking out a policy before 30, I didn't know about the Medicare Levy Surcharge. What sparked me to take out health insurance was getting an unexpected tax bill. While I had held an extras policy, I didn't know that it was only a hospital policy that would help me avoid paying the MLS."
Don’t get caught out by the MLS
How health insurance works
Health insurance isn’t compulsory in Australia, but it can help cover costs that aren’t included under Medicare and give you more choice in how and where you’re treated. This can include access to private hospitals, shorter waiting times and the ability to choose your doctor.
There are two main types of cover:
- Hospital cover: this helps pay for treatment as a private patient in hospital, including accommodation and some medical services. Policies are split into different tiers (Basic, Bronze, Silver and Gold), which determine the range of treatments covered.
- Extras cover: this helps pay for out-of-hospital services like dental visits, physiotherapy and optical care. Cover levels vary, but most policies include routine services such as check-ups and basic treatments, while higher level plans can include services like major dental, orthodontics and psychology.
You can take out hospital and extras cover separately or combine them in a single policy, but you’ll need hospital cover to avoid LHC loading and the MLS – extras cover does not qualify. Taking out hospital cover at a younger age may also make you eligible for a private health insurance discount, which reduces your premiums.
The youth discount: why getting cover before 30 saves you money
If you take out private hospital cover before the age of 30, you may be eligible for an age-based discount on your premiums. The discount is based on your age when you first take out cover and reduces your premium by up to 10%.
The earlier you take out cover, the higher the discount you may receive. These are the discount rates by age:
| Age when you first take out hospital cover | Discount on premiums |
|---|---|
| 18–25 | 10% |
| 26 | 8% |
| 27 | 6% |
| 28 | 4% |
| 29 | 2% |
| 30 | 0% |
If you’re on a couples or family policy, the age-based discount is calculated as an average of the adults’ individual discounts. For example, if one adult qualifies for a 4% discount and the other for 2%, the policy as a whole would receive a 3% reduction.
For example, if you’re 27 when you first take out hospital cover, you may pay around 6% less than someone who delays taking out cover until their 30s (based on three years under 30 at 2% per year).
This discount can remain in place until you turn 41, after which it reduces by 2% each year.
Health insurance costs for under 30s
The cost of health insurance depends on the type of cover you choose, your income, your location, your provider and whether they offer an age-based discount.
If you’re taking out cover for the first time, these are the cheapest plans available at each age up to 30 through Savvy as of April 2026:
| Age | Basic | Bronze | Silver |
|---|---|---|---|
| 18–25 | $71 | $83 | $110 |
| 26 | $72 | $85 | $112 |
| 27 | $74 | $87 | $115 |
| 28 | $75 | $89 | $117 |
| 29 | $77 | $91 | $120 |
| 30+ | $78 | $92 | $122 |
| Source: Compare Club, April 2026 Quotes based on a single person living in Sydney earning a base-tier salary, choosing a $750 excess. Prices rounded to the nearest dollar. |
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Even small differences in age can add up to noticeable savings. For example, a 24-year-old on a Basic plan could pay $7 less per month than someone aged 30, which adds up to $84 per year.
The Medicare Levy Surcharge and what it means for under 30s
If you earn above a certain amount, you may have to pay the Medicare Levy Surcharge (MLS), an extra tax of 1%–1.5% depending on your income.
As of 2025–26, the thresholds are:
| Income bracket | Base tier | Tier 1 | Tier 2 | Tier 3 |
|---|---|---|---|---|
| Single | $101,000 or less | $101,001–$118,000 | $118,001–$158,000 | $158,001 or more |
| Couple/family | $202,000 or less | $202,001–$236,000 | $236,001–$316,000 | $316,001 or more |
| MLS payable | 0% | 1% | 1.25% | 1.50% |
| Source: Australian Taxation Office | ||||
If your income is above the threshold, you can avoid the surcharge by taking out hospital cover. Only a Basic plan is needed to qualify, which can work out cheaper while also giving you a base level of health insurance.
For example, a 28-year-old earning $110,000 (Tier 1) would face a $1,100 surcharge. The cheapest Basic policy through Savvy at $75 per month costs around $900 for the year, saving roughly $200 compared with paying the surcharge.
However, while a Basic hospital plan is enough to avoid the MLS, it provides only minimal health benefits. If you want broader cover or additional inclusions, you will need to choose a higher-level hospital plan.
