Private Health Insurance vs MLS 2025-26
Quick answer: private health insurance starts to make financial sense when your net hospital cover premium is lower than the MLS bill you would otherwise pay. The right comparison is premium after rebate vs surcharge avoided.
Break-even MLS bills for singles
| Income | MLS rate | Approx annual MLS bill | Decision lens |
|---|---|---|---|
| $105,000.00 | 1.00% | $1,050.00 | If your net hospital premium is below this, cover can be financially easier to justify. |
| $130,000.00 | 1.25% | $1,625.00 | If your net hospital premium is below this, cover can be financially easier to justify. |
| $170,000.00 | 1.50% | $2,550.00 | If your net hospital premium is below this, cover can be financially easier to justify. |
Common mistakes
What people compare incorrectly
→ They compare MLS against the sticker premium instead of the premium after rebate.
→ They assume extras cover avoids MLS, even though only eligible hospital cover counts.
→ They ignore that family thresholds and spouse income can change the decision completely.
Related tools
Estimate your MLS bill
Use your income, spouse income and family status instead of relying on a rough break-even estimate.
Check the rebate effect
Move from gross premium to net premium before comparing it with the surcharge.
Review MLS thresholds
Confirm whether you are actually in an MLS tier before paying for cover to avoid it.
FAQ
When is private health insurance cheaper than MLS?
The break-even point is when your net hospital cover premium is lower than the MLS you would otherwise pay. That answer changes with income, rebate eligibility and family status.
Does extras cover avoid MLS?
No. To avoid MLS you need eligible hospital cover, not extras-only cover.
Should I compare gross premium or net premium?
Use the net premium after any private health insurance rebate, then compare it with the MLS bill you are trying to avoid.
Tax Accuracy & Sources
Reviewed: March 2026 · Tax year: 2026-27
This page is a 2025-26 planning comparison between MLS and private hospital cover. It does not compare specific insurance policies or non-tax health preferences.
Related calculators
Medicare Levy & MLS Calculator Calculate Medicare Levy and MLS Medicare Levy Reduction Calculator Low income Medicare levy shade-in reduction Medicare Levy Exemption Checker Check ATO exemption categories, MES evidence and full or half exemption days MLS Thresholds 2026-27 ATO Medicare levy surcharge income tiers for 2026-27 — singles from $105,000, families from $210,000, charged at 1% to 1.5% MLS Thresholds 2025-26 Prior-year ATO Medicare levy surcharge tiers for returns being lodged now — singles from $101,000, families from $202,000 MLS Family Thresholds How the family MLS threshold is built — $210,000 base plus $1,500 for each dependent child after the first