“If past governments had indexed the threshold to average weekly earnings over the last eleven years the Medicare Levy Surcharge threshold would now be $150,000 for families. This is the exact threshold the Treasurer announced in Tuesday’s budget,” Stuart Rodger, Health Actuary and Partner, Deloitte said.

“Middle income families who want to financially rely on the public system are now more free to do so,” Rodger said.

However, for singles, the indexed threshold would be $75,000, so the Treasurer’s increase to $100,000 is more than expected Rodger pointed out. “This change in the Medicare Levy Surcharge could be described as more than the pain the health funds had to have,” he said.

“The change will see some young people dropping out of the health insurance pool,” Rodger explained. “However the volume of young people taking health insurance has helped to keep premiums down for older people in recent years,” he said.

“It is unfortunate that next year’s community-rated health premiums will see a one-off jump as some of the under-30s drop out,” Rodger said.

He cautioned that anyone over 30 ought to think twice before stopping their private health insurance, because under Australia’s lifetime community rating system it will cost them more to return to private health cover later.

“This is important when you realise that this Government has not committed to indexing the Medicare Levy Surcharge threshold going forward, so dropping out over 30 could be quite costly,” he said.