Medicare Levy Surcharge (MLS)
Need hospital cover to avoid the MLS?
If you're a higher-income earner, having hospital cover can help you avoid paying the Medicare Levy Surcharge (MLS). Learn more about the MLS below.
6 weeks free + skip 2 & 6 month waits on extras* when joining on combined cover by 8 December.
*For new members who have not been a member during the last 12 months, joining on combined hospital and extras cover, paying by direct debit. Must pay first month to receive offer. Other waits (including hospital waits), annual and sub limits apply. Extras claims made with a previous fund count towards annual limits. Offer only available via Frank website or phone joins. Not available with any other offer or Frank OVHC. Offer ends 8th December 2025.
About the Medicare Levy Surcharge (MLS)
-
Aimed at higher income earnersAbout hospital coverThe MLS is a way the Australian government encourages people on a higher income to take out private hospital insurance.
-
Reduces pressure on the public systemPrivate vs publicWhen people use their private health insurance it helps ease pressure on the public system. Hospital cover is needed to avoid the MLS.
-
Avoid the MLS by taking out hospital coverGet a quoteTo avoid the MLS if you're a higher income earner, you will need hospital cover, not just extras. Any level of Frank hospital cover will do the trick!
Who pays the Medicare Levy Surcharge?
The MLS falls into three payment tiers: 1%, 1.25% or 1.5%. How much you pay depends on how much you earn. You’ll be liable to pay the MLS if you're single and earn over $101,000, or if you're part of a couple or family with a combined income of over $202,000 (plus $1,500 for each dependent child after the first one).
Income thresholds - Single
|
Income threshold |
$101,000 or less | $101,001 - $118,000 | $118,001 - $158,000 | $158,001 or more |
|---|---|---|---|---|
| Tier | Base tier | Tier 1 | Tier 2 | Tier 3 |
| % of income you may pay | 0.0% | 1.0% | 1.25% | 1.5% |
| MLS you may have to pay | $0 | $1010 - $1180 | $1475 - $1975 | $2370 or more |
Income thresholds - Couples, Families & Single parents
| Income threshold (increases by $1,500 per child after your first) |
$202,000 or less | $202,001 - $236,000 | $236,001 - $316,000 | $316,001 or more |
|---|---|---|---|---|
| Tier | Base tier | Tier 1 | Tier 2 | Tier 3 |
| % of income you may pay | 0.0% | 1.0% | 1.25% | 1.5% |
| MLS you may have to pay | $0 | $2020 - $2360 | $2950 - $3950 | $4740 or more |
For more detailed information about how the MLS may affect your taxes, talk to a trusty tax professional.
Affordable Frank covers
-
Emergency ambulance
-
Accident Protection
-
Private Emergency Department Attendance Benefit
-
Emergency ambulance
-
Dental surgery
-
Joint reconstructions
-
Emergency ambulance
-
Bone, joint & muscle
-
Digestive system
* The price shown is per week and applies to a Single, aged 30, living in VIC. It excludes LHC loading and includes a Base Tier Government Rebate
| Extras services (when included on cover) |
|---|
| All extras benefits except as specified below. Waiting Period: 2 Months |
| Optical, home and domestic aids and medical aids. Waiting Period: 6 months |
| Major dental services (including full & partial dentures, orthodontics, crown & bridgework, endodontic services such as root canal, gold fillings, indirect restorations, surgical extractions of a tooth/teeth including wisdom teeth). Waiting Period: 12 Months |
| Health appliances including nebuliser pump, blood glucose monitor, pressure garments, sleep apnoea monitor, extremity pump, hearing aids, orthopaedic appliances (GMHBA approved), prostheses (GMHBA approved non-surgical), tens monitor, podiatry surgical procedures and orthotic appliances (foot). Waiting Period: 12 Months |
| Hospital services (when included on cover) |
|---|
| Accidents - bodily injuries resulting from accidents which occur after the date of joining GMHBA or upgrading to a higher cover. Waiting Period: No |
| Obstetrics and maternity. Waiting Period: 12 months |
| Pre-existing ailment, illness or condition (other than psychiatric, rehabilitation and palliative care). Waiting Period: 12 months |
| Any other benefit for hospital (or hospital substitution) treatment. Waiting Period: 2 months |
A pre-existing condition is one where signs or symptoms of your ailment, illness or condition, in the opinion of a medical practitioner appointed by GMHBA (not your own doctor), existed at any time during the six months preceding the day on which you purchased your hospital insurance or upgraded to a higher level of hospital cover and/or benefit entitlement.
A special waiting period applies to obtain benefits for hospital treatment for new members who have pre-existing conditions. The waiting period also applies to existing members who have recently upgraded their level of hospital cover. If the ailment, illness or condition is considered pre-existing:
New members
New members must wait 12 months for any hospital benefits (other than psychiatric, rehabilitation and palliative care).
Existing members (transferring or upgrading)
Members transferring/upgrading to a higher hospital cover must wait 12 months to get the higher hospital benefits (other than psychiatric, rehabilitation and palliative care).
Existing members (with at least 12 months membership)
Existing members with at least 12 months membership in total across their old and new cover are entitled to the lower benefits on their old cover.
Silver Hospital cover provides the same single room coverage as Gold Hospital, but co-payments of $100 per day up to a maximum of $700 per admission apply. Co-payments are not the same as hospital excess. Please note: Some private hospitals only have single rooms and co-payments will apply.
Co-payments do not apply.
Do I have to pay the MLS?
If you don’t have hospital cover, you may have to pay the MLS if you are:
- single and have a taxable income above $101,000
- a family unit (including couples or single parents with dependants) with a combined taxable income above $202,000. The family income threshold is increased by $1,500 for each MLS dependent child after the first child.
How much will I have to pay?
How much MLS you pay depends on your income tier and the current thresholds as set by the Australian Government. These thresholds may be reviewed or changed, with the most recent changes effective from 1 July 2025 for the 2025-2026 financial period.
To figure out what your Medicare Levy Surcharge may be check out Private Healthcare Australia’s calculator.
Picking your policy to avoid MLS
Hospital cover is exactly what it sounds like: it’s health insurance that contributes to the costs of hospital treatment (as a private patient in a public hospital or at a private hospital) while you’re an inpatient.
To pick the right Frank hospital cover for you, take time to figure out why you want it. Our Basic, Bronze, Silver, or Gold tier hospital covers can help you avoid the MLS (as a higher-income earner). If you simply want to avoid paying the MLS, then our Basic Accident Boost Hospital might be for you.
Want a little more from your health cover? Discover the added value of combined hospital and extras cover.
Other reasons to take out hospital cover
You don't need a reason to take the plunge and get hospital cover, but that doesn't mean there isn't one! From trying to save on tax if you're a high-income earner, to turning 31, learn more about the perks of taking out hosptial cover.
-
More control over your careAll about hospitalWith hospital cover, you get more choices in who treats you and where, and you may have shorter waits for non-urgent procedures.
-
Avoid lifetime health cover loadingAbout LHCTurning 31 and don't have hospital cover? Learn how LHC could affect your premiums
-
Accident protectionLearn More
It's cover for hospital treatment that's required due to an accident, including services normally excluded in your policy. To qualify, you must seek initial treatment within 48 hours of sustaining the injury and be admitted within 90 days.
Different types of cover
You’ll only avoid the MLS if you’ve got hospital cover, but it’s worth checking out the different types of health insurance provided by Frank.
-
Hospital coverAbout hospitalFrom surgeon costs to theatre fees, what does hospital cover pay towards?
-
Extras coverAbout extrasWent a little too hard training or have a toothache? Here's how extras cover can help! *But remember extras on its own won't help you avoid the MLS
-
Combined coverGet a quoteTake out hospital cover for just in case plus select extras to meet your everyday health care needs!
Private health insurance vs Medicare
If you are eligible for Medicare and are a resident of Australia for tax purposes, you can choose to rely solely on the public health system (funded by Medicare) or a combination of Medicare and hospital cover.
Here are some of the advantages of hospital cover:
- Typically shorter wait times for elective surgery in a private hospital
- Avoid paying the Medicare Levy Surcharge (MLS) with appropriate hospital cover if you are a higher-income earner
- Flexibility of choosing a cover that suits your healthcare needs
- More choice of your treating doctor and hospital
Reasons to love Frank
Frank health insurance is simple, easy, not-for-profit health insurance. We're here for our members, not shareholders. And because that's all we do, we do it well. We talk straight, and don't complicate.
Choose your own provider
Less overheads means you pay less
30 day cooling off period
Frequently Asked Questions
So how can you avoid paying the Medicare Levy Surcharge (MLS)? Based on the criteria below, you may not need to pay the MLS if you:
- earn a taxable income below the MLS threshold ($101,000 for singles or $202,000 for families/couples/single parents. The family income threshold is increased by $1,500 for each MLS dependent child after the first child).
- earn a taxable income above the MLS threshold and hold private hospital cover for yourself and any partner or applicable dependants for the full financial year.
- are a prescribed person with no dependants who already has a Medicare Levy exemption, you may also be exempt from the MLS for either a half or full financial year.
Find out more about the Medicare Levy Surcharge exemptions.
Lifetime Health Cover loading (LHC) is basically an incentive set by the government, to encourage young people to take out hospital cover and reduce strain on the public system. It works like this: if you don’t take out hospital cover before the 1st of July, after your 31st birthday, you’ll pay a 2% LHC loading fee when you eventually do take out a policy. That loading goes up 2% every year you go without hospital cover (up to a maximum of 70%). The LHC loading is removed after 10 years of continuous hospital cover.
LHC won’t impact your obligations under the MLS, since eligible hospital cover exempts you from the MLS. But it’s something to keep in mind if you’re young and weighing up the benefits of hospital cover. Basically, the longer you wait after turning 31, the more you’ll pay in the long run if you eventually decide to take out hospital cover.
You might hear these two terms used interchangeably, but they’re different things.
- Medicare Levy: A 2% tax that most Australians pay to help subsidise Medicare, Australia's public healthcare system.
- Medicare Levy Surcharge: An additional tax, paid by those on higher incomes, who don’t have eligible hospital cover.
Most Australians will have to pay the Medicare Levy, regardless of whether they have hospital cover or not. The MLS is an extra tax, specifically for high-income earners who don’t have hospital cover for the full financial year.
At Frank, all our hospital covers match the appropriate level of cover required for MLS purposes.
As per government guidelines, your hospital cover must:
- have an excess of $750 or less if you’re single; or
- have an excess of $1,500 or less if you’re a family, couple, or single parent; and
- be provided by a registered health insurer.
Having only extras or ambulance cover on its own doesn’t count as an appropriate level of private health insurance hospital cover.
For more information about the Medicare Levy Surcharge, and your tax obligations you can:
- Visit ato.gov.au/privatehealthinsurance
- Visit health.gov.au/privatehealth
- Visit Medicare Levy Surcharge (privatehealth.gov.au)
- Contact Frank
- Consult a tax professional.
Make sure you’re only paying for what you’re likely to need. We can assess your cover and see if you’re on the right cover for your needs.
We have a range of affordable policies to suit all kinds of needs and budgets.
- We are 100% online – we have less overheads so you pay less.
- We’re not for profit which means no profits are returned to shareholders.
- Anyone with Frank extras cover can save 15 - 40% off* all dental treatments performed by a smile.com.au approved dentist.
*These savings may vary between dentists, and this is in addition to your existing Frank dental benefits.
If you cancel your Frank Health Insurance cover within 30 days of joining, you will receive a full refund of any premiums received by Frank, provided you have not made a claim.
Freedom limit, flex it your way
Because sometimes your needs might change a little, you have a $500 freedom limit to claim on your 7 included extras services.
And the longer you're with us, the more you can claim.
Get an extra $50 to claim on your freedom limit each full calendar year, with a maximum of $200 after 4 years of continual cover.
Freedom limit, flex it your way
Because sometimes your needs might change a little, you have a $700 freedom limit to claim on your 11 included extras services.
Plus an additional Optical limit. You can claim 100% back on optical up to your $150 annual limit.
And the longer you're with us, the more you can claim.
Get an extra $100 to claim on your freedom limit (excludes optical) each full calendar year, with a maximum of $400 after 4 years of continual cover. Your loyalty benefit will be available on 1 January after you've completed one full membership year.
