After Lodging a 186 Visa, You May No Longer Be Exempt From the Medicare Levy
Many people assume Medicare only matters after their 186 permanent residency visa is granted. In practice, the key date is often when you become eligible to enrol in Medicare, not the PR grant date.
Many people assume that if PR has not been granted yet, Medicare still does not matter.
That is often not true.
You do not have to wait for PR approval before applying for Medicare
Services Australia is quite clear on this point: if you have applied for a permanent residency visa, you may be able to enrol in Medicare before the visa is granted. You still need to meet at least one of the extra conditions below:
- You hold a visa that lets you work
- Your spouse is an Australian citizen, permanent resident, or eligible New Zealand citizen
- Your parent or child falls into one of those categories
So if you have already lodged a 186 visa, you are living in Australia, and you meet one of those conditions, you may already be eligible to enrol.
Another point people often miss: you do not necessarily need to wait for a Bridging Visa A before applying for Medicare. What matters is that you have a valid visa plus work rights, or a qualifying family relationship. If you lodged your 186 while your 482 was still valid, the 482 itself may already be enough.
From what date does the Medicare levy start to matter
Many people assume that if PR has not been granted yet, the Medicare levy still does not apply. That is not how the ATO usually frames it.
The practical question is not your PR grant date.
The practical question is when you became eligible to enrol in Medicare.
The ATO position is that Medicare levy issues usually start from the date you become eligible for Medicare, not from the date your PR is approved.
In other words, a Medicare levy exemption only applies to the period when you genuinely were not eligible for Medicare. If you were already eligible, not enrolling yet does not usually preserve the exemption.
Delaying the application does not usually help.
Private insurance does not remove the standard 2%
Keeping OVHC or private insurance does not mean the Medicare levy problem is solved.
These are two different things:
- The standard Medicare levy is the ordinary 2% levy. Private insurance does not remove it. The key issue is when you became eligible for Medicare.
- Medicare Levy Surcharge (MLS) is different. That is the extra surcharge linked to higher income levels and whether you hold compliant private hospital cover.
For 2025–26, the family MLS threshold starts at $202,000. For the second and each later dependent child, the threshold increases by $1,500.
If your family income is below $202,000, MLS may not be the main issue at all.
So what should you do with private insurance
This is really two different questions.
Australian private insurance usually has two broad parts:
- Hospital cover, which is for larger risks such as surgery and hospital stays
- Extras cover, which is for smaller routine costs such as dental, glasses, and physio
Hospital cover: keep it, but look at the cost
Medicare can cover the basics, but public hospitals still involve waiting times and you cannot always choose your doctor. For a family with children, that may still matter. So I would not treat Medicare as an automatic reason to cancel all private cover immediately.
If hospital use is unlikely, one option is to reduce the level of cover and increase the excess to $500 or higher. That can bring premiums down.
Extras: this is where many families lose money
Work out how much you actually spend each year, and how much the policy really gives back. Many families mainly use Extras for dental cleaning and a few smaller claims. Sometimes the rebate is still less than the premium.
If that is your situation, cancelling Extras or downgrading to a very basic dental-focused plan may make more sense.
Higher income households are different
If your combined family income is above $202,000 in 2025–26, and you do not hold hospital cover, then Medicare Levy Surcharge can apply.
MLS rates range from 1% to 1.5%, depending on income. In that situation, keeping hospital cover may actually be cheaper than paying MLS.
One important detail: Extras alone does not solve MLS. The exemption is about hospital cover, not dental or optical add-ons.
FAQ
Can I apply for Medicare after lodging a 186 visa but before PR is granted
Possibly, yes.
It depends not only on whether you lodged the 186, but also whether you are living in Australia and whether you meet one of the extra eligibility conditions listed by Services Australia.
If I have not applied for Medicare yet, can I still stay exempt from the Medicare levy
Not necessarily.
The key test is whether you were eligible for Medicare, not whether you had already gone and got the card.
If I keep OVHC, can I stay exempt from the ordinary Medicare levy
No.
OVHC and the ordinary Medicare levy are different issues. Keeping OVHC does not decide whether you owe the standard Medicare levy.
OVHC may still matter for visa compliance or for medical cover before Medicare applies. In some cases it also interacts with MLS, but that is a separate tax issue, not the ordinary 2% levy.
When can someone actually get a Medicare levy exemption
The ATO lists three broad categories.
1. Not entitled to Medicare benefits, which is the most common one
Your visa does not give you access to Medicare, and your spouse and all dependants are also not entitled during the same period. In that case, you may need a Medicare Entitlement Statement from Services Australia. Applications can take up to 8 weeks, and they open from 1 July each year.
2. Medical exemption
This applies in some specific medical or defence-related cases, including certain DVA Gold Card holders.
3. Foreign resident
You were not an Australian tax resident for that income year.
See: Medicare levy exemption – ATO
This article is for general information only and is not tax or legal advice. For your own situation, check the official ATO and Services Australia pages, or speak to a qualified adviser.
References:
- Services Australia: Enrolling in Medicare if you’re an Australian permanent resident
- Services Australia: Documents to enrol in Medicare if you’ve applied for permanent residency
- ATO: Not entitled to Medicare benefits
- Services Australia: Who can get a Medicare Entitlement Statement
- ATO: Medicare levy surcharge thresholds and rates for 2025–26
- ATO Community: 2025-09-22 reply on 482, 186 and Medicare levy timing
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