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Whether you should take out private health insurance will depend on your circumstances. However, you might want to consider it if you value having more choice when it comes to your healthcare. With private health insurance you can:
You can purchase private health cover in a few different forms. Private hospital cover gives you the option of being treated as a private patient, so you can choose your own available doctor, stay in a private room (when available) and avoid public hospital waiting lists, among other perks. Extras cover helps pay for the treatment you receive out of hospital that Medicare doesn’t cover. When you receive treatment as a private patient, Medicare in combination with your private hospital insurance will cover you for 100% of the Medicare Benefit Schedule (MBS) fee. You may still have a gap payment, which is the difference between the MBS fee and what your medical treatment costs.
For out-of-hospital treatments listed on your extras policy, your insurance provider will pay either a percentage of the total costs or a set dollar amount. The amount you can claim may be subject to lifetime, annual or sub limits.
If you had a medical issue before taking out your policy, it may be considered a pre-existing condition. Luckily, you won’t have to pay any more for your policy than someone without a medical history would, although you may have increased waiting times for treatment relating to your condition.
Always check your policy brochure before claiming as limits, exclusions and waiting periods will apply.
Medicare does not pay for ambulance services. You can get cover for ambulances from some private health insurers. People in Queensland and Tasmania have ambulances covered by their state governments. If you are a Department of Veteran’s Affairs (cardholder) you are covered throughout Australia.
Some ambulance services offer memberships to cover the costs of transport and treatment. Many health funds offer ambulance cover that you can buy on its own, or there may be some ambulance cover included on your health insurance policy.
Cover for pregnancy and birth-related services is included in Gold hospital insurance policies and some ‘plus’ policies (like Silver Plus). Hospital cover for pregnancy and birth has a 12-month waiting period, so you need to have it before you get pregnant.
Private hospital insurance with pregnancy cover can help you to pay for private pregnancy, labour and post-natal care; C-sections; in-patient obstetrician care and a private hospital room (if it’s available).
Some private hospital policies also cover assisted reproduction services, such as infertility testing, in-vitro fertilisation (IVF) and gamete intro-fallopian transfer (GIFT). However, hospital insurance only covers in-patient care, that is, the treatment you receive as a patient admitted in the hospital.
Dental cover is usually only available through extras cover (although private hospital policies can help pay for dental treatment and operations you have in hospital). Exactly what is covered depends on your level of cover, but generally dental check-ups are standard.
Your health insurance provider will usually set annual limits on how much you can claim for dental. You can check this in your policy documents.
Optical services and products can be covered by either hospital or extras policies. Treatments you get in hospital will come under hospital cover, while extras cover can help pay for eyewear.
Your health insurance provider will usually set annual limits on how much you can claim for optical. You can check this in your policy documents.
Your extras health insurance might help you pay for other services such as psychology, physiotherapy, gym memberships, remedial massages, occupational therapy, podiatry, dieticians, chiropractic services and natural remedies. You’ll have to choose a policy that includes the services you want.
Your health insurance provider will usually set annual limits on how much you can claim for different types of medical treatment. You can check this in your policy documents.
Below is a list of all registered health funds in Australia. Policies are sometimes sold under secondary brand names or by another company, which aren’t included in this list.
The information provided is current as of July 2023 and sourced from the Private Health Insurance Ombudsman. This list is subject to change.
The cost of private health insurance in Australia depends on:
Private health insurance in Australia is community rated, meaning that you’ll never be charged a higher base premium than someone else for the same policy based on risk factors such as race, gender, pre-existing conditions or any other reason. However, there are several factors that can still affect how much you pay in premiums or for premium increases, such as your level of cover, state of residence, rebates, discounts and Lifetime health cover loading.
For hospital cover, policies are divided into four tiers (Basic, Bronze, Silver and Gold) which are priced accordingly. Taking out a higher level of hospital cover will naturally cost you more, although you can often reduce your premiums by agreeing to a higher excess instead. Extras cover levels are decided by the insurer and aren’t regulated by the government like hospital cover is.
Your premiums will also be influenced by your eligibility for an age-based discount, the Australian Government’s rebate and Lifetime health cover (LHC) loading.
When you’re admitted to hospital as a private patient, you may have to pay a lump sum of money to your private health insurer, which is known as the excess. This could be in the form of a payment per hospital admission but may only be for the first admission of the calendar, financial or membership year depending on your insurance provider. Choosing a higher excess may allow you to pay lower premiums.
You may also have to pay a co-payment, which is a set amount you’re required to pay each day you’re in hospital. This is typically capped to a certain number of days per stay.
Each eligible hospital treatment has a Medicare Benefits Schedule (MBS) fee, a price the government believes is fair. Medicare pays 75% of this fee, while your health insurer pays the remaining 25%. If your specialist charges this exact schedule fee, you won’t incur any out-of-pocket expenses, or ‘no gap’.
If your specialist charges above this fee, you’ll have to pay the extra amount not covered by Medicare and your private health insurance. For extras services, gap cover simply means that the health care provider doesn’t charge above your extras benefits limit which results in no out-of-pocket costs. Your insurer may have agreements with certain providers to eliminate out-of-pocket expenses. Be sure to check with your insurer before seeking treatment to understand what costs you may incur.
For more information check out our page explaining gap payments.
While not tax deductible, private health insurance can still have an impact on your tax.
Firstly, the private health insurance rebate is available to anyone within the eligible income threshold with a hospital, extras or combined health insurance policy, and it can be claimed each year via your tax return, whether or not you have an ABN. Alternatively, you can also choose to claim the rebate as a discount on your premiums instead.
Also, if you earn more than $93,000 as a single or $186,000 as a couple or family and don’t hold sufficient private hospital insurance, you could incur the Medicare Levy Surcharge (MLS). The MLS is a government surcharge levied on the taxable income of high-income earners who don’t hold private hospital cover. It is applied as a percentage of your annual income (e.g. 1.5%), which you’ll need to pay for the number of days in the financial year that you didn’t hold hospital coverage.
Total knee replacement (single)
Total hip replacement (single)
1 Australian Institute of Health and Welfare – Elective surgery waiting times, 2021-22. Accessed September 2023
2 Australian Department of Health and Aged Care – Medical Cost Finder, 2021-22. Accessed September 2023