It pays to hang on to your PHI: Choice

From 1 July, the 30 per cent health insurance rebate will be means tested for individuals earning more than $83,000 and families on more than $166,000.

But Choice says when weighed against the extra taxes high income earners would pay if they opted out of private cover, most would be better off shouldering the extra cost of premiums.

People who do not have private hospital cover are slugged 1 to 1.5 per cent of their income on the higher Medicare Levy Surcharge.

"If you're a higher income earner and things are getting tight, don't rush to dump your private hospital cover," Choice spokeswoman Ingrid Just said in a statement.

"If you do, you'll be hit with the higher Medicare Levy Surcharge that comes on top of the Medicare Levy most people pay."

Ms Just said if people felt they weren't getting value for money on their hospital and extras cover they would be better off scrapping the extras component and putting the