As the end of the financial year (EOFY) approaches, many Australians are busy tidying up their finances. While EOFY often brings thoughts of receipts, deductions, and tax returns, there’s one area that can significantly impact your tax bill: private health insurance. Not only does having the right cover keep you healthy, but it can also save you money come tax time. Here are our top four tips to help you make the most of your private health insurance before 30th June.

1. Avoid the Medicare Levy Surcharge
If you earn above certain income thresholds, you may be liable for the Medicare Levy Surcharge (MLS). This additional levy is imposed by the government if you don’t have an appropriate level of hospital cover. The MLS ranges from 1% to 1.5% of your taxable income, depending on how much you earn.

What you can do:
• Review your income for the current financial year. If you're close to or over the threshold, consider taking out a compliant private hospital policy before June 30th to avoid this extra charge.
• Keep in mind that even if you purchase hospital cover now, waiting periods still apply, so act fast!
Doctors' Health Fund tip: Use the ATO's MLS calculator to estimate whether you'll be affected and compare premiums to see if getting covered makes financial sense.

2. Maximise your private health insurance rebate
The Australian Government offers a rebate on private health insurance premiums based on your income. Depending on your earnings, you could receive up to 24.118% back as a reduction in your premium payments or claim it as a refundable tax offset when lodging your return.
If you’re currently claiming the rebate through reduced premiums, double-check that the amount aligns with your expected income for the year. Adjustments can be made retroactively at tax time if needed.

Fun fact: Did you know you can claim unused portions of your rebate as a lump sum? Make sure you lodge your tax return to take full advantage!

3. Beat Lifetime Health Cover (LHC) loading
Lifetime Health Cover (LHC) loading applies if you delay purchasing hospital cover beyond your base entry age of 31. For every year you wait after turning 31, a 2% loading is added to your premium, up to a maximum of 70%. Once applied, these loadings remain in place for ten continuous years of holding cover.

What you can do:
• If you’re nearing your 31st birthday, securing hospital cover before June 30th ensures no LHC loading will apply.
• Already insured? Take this opportunity to review your extras cover too. Are you using all the benefits you’re paying for? Consider switching to a more tailored plan that suits your needs and budget.

4. Prepay your premiums for July
One clever trick savvy taxpayers use is prepaying their private health insurance premiums for the next financial year. By doing this before June 30th, you can bring forward your deduction into the current tax year.

What you can do:
• Contact your insurer to find out how far in advance you can pay your premiums. Many allow payments up to 12 months ahead.
• Keep in mind that while prepayment boosts your immediate deduction, it reduces what you’ll be able to claim next year. Weigh the pros and cons based on your personal situation.

Final thoughts
Navigating private health insurance doesn’t have to feel overwhelming, especially when EOFY rolls around. With a bit of planning and strategic action, you can maximise savings while ensuring you’re adequately covered for the year ahead. Whether it’s avoiding unnecessary levies, optimising your rebate, or locking in discounts, small steps today can lead to big wins tomorrow.
So, grab a cup, sit down with your policy documents, and give yourself the gift of peace of mind - and potentially a fatter tax refund! After all, being proactive about your health and finances is always a win-win.

Contact our friendly and knowledgeable sales team to find out what discount you’re eligible for by emailing [email protected] or calling 1800 226 126. 

Disclaimer: The information in this article does not constitute legal, financial, medical or other professional advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. Persons implementing any recommendations contained in this article must exercise their own independent skill or judgement and seek appropriate professional advice relevant to their own particular circumstances. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Avant and its related entities are not responsible to any person for any loss suffered in connection with the use of this information. Information is only current as of 1 April 2026.