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Private health cover works by helping to pay for your care (or covering the entire cost) when you’re either treated as a private patient in a hospital, or out of the hospital for certain services (e.g. dental, optical and therapies such as physiotherapy or remedial massages). In exchange, you pay fortnightly/monthly/annual premiums to maintain your cover.

Health insurance can cost roughly $2,499 per annum for private hospital cover, $1,060 for extras-only policies and $3,450 for a combined policy – according to IPSOS in 2019*, based on responses from thousands of surveyed Australians. However, policies can cost more or less, depending on your coverage and choice of insurer.

While many of the surveyed Aussies cited above said that their policy was ‘good value for money’ (roughly 73%), it’s important to note the following:

1. annual rate changes might mean your policy’s value might change; or
2. as your healthcare needs evolve, it could be time to review your coverage.

^{* Source: IPSOS survey of thousands of Australians between 2018-19. Average prices do not include the Australian Government Rebate.}

The best fund for you will depend on your unique circumstances. Thanks to our handy private health insurance comparison service, we make it even easier to find health insurance. With our free tool, it takes only minutes to compare policies side-by-side to find great-value cover that suits your family’s needs.

Our partners funds are:

• AHM
• NIB
• Australian Unity
• GMHBA
• Frank Health Insurance
• HIF
• TUH
• Westfund
• AIA
• Bupa
• Qantas
• Union Health

We do not compare all health funds in the market, or all policies from our partner funds, and at times certain funds or products might be unavailable. Learn more.

Private health insurers in Australia

• AAMI
• ACA Health Benefits Fund
• AIA Health Insurance
• AHM Health Insurance
• Australian Unity Health Limited
• APIA
• Bupa Health Insurance
• CBHS Corporate health
• CBHS Health Fund Limited
• CDH Benefits Fund
• CUA Health Limited
• Defence Health Limited
• Doctor’s Health Fund
• Emergency Services Health
• Frank Health Insurance
• GMHBA Limited
• Grand United Corporate Health
• GU Health
• HBF Health Limited
• HCF
• Health Care Insurance Limited
• Health Insurance Fund of Australia Limited
• Health Partners
• Latrobe Health Services
• Medibank Private Limited
• Mildura Health Fund
• National Health Benefits Australia – Onemedifund
• Navy Health
• NIB Health Funds
• Nurses & Midwives Health
• Peoplecare Health Insurance
• Phoenix Health Fund Limited
• Police Health
• Qantas Insurance
• Queensland Country Health Fund
• Railway and Transport Health Fund Limited
• Reserve Bank Health Society
• Lukes Health
• Suncorp Health Insurance
• Teachers Health
• Transport Health
• TUH
• Westfund Limited

The information provided is current as of August 2021 and sourced from the Private Health Insurance Ombudsman. This list is subject to change.

Medicare does not cover rides in an ambulance, or any other emergency transportation costs (e.g. helicopter evacuations). In Queensland and Tasmania, this cost is borne through homeowners’ council rates. For everyone else, you must take out ambulance cover through a standalone policy or membership, or through private health insurance.

Medicare and private health insurance are designed to compliment each other.

When you’re admitted to a private hospital, Medicare will pay up to 75% of your treatment’s schedule fee as a private patient. Your private health insurance contributes the additional 25% of the scheduled fee as well as covering your accommodation costs and theatre fees for the procedure, and in some instances additional gap cover where your doctor chooses to charge over the scheduled fee.

For out-of-hospital treatments though, extra coverage is designed to contribute towards those services where Medicare does not pay a benefit, like dentist treatments or physiotherapy sessions. Optical is a great example of how Medicare and private health insurance extras products can work together: Medicare pays for the eye check consultation with the optometrist, and your private health insurer provides coverage towards the prescription glasses or contact lenses that are prescribed.

Whilst not tax deductable, there are impacts on your tax from private health insurance.

Firstly, the Australian Government’s private health insurance rebate is available to anyone with a hospital, extras or combined health insurance policy, and it can be claimed each year via your tax return. Alternatively, many of our customers choose to claim the rebate instead as a discount on their premiums.

Also, there is another tax impact on high-income earners. If you earn more than $90,000 as a single, or $180,000 as a couple or family, and don’t hold a sufficient private hospital insurance, you could incur the Medicare Levy Surcharge (MLS). This is applied as a percentage of your annualised income (e.g. 1.5%), which you’ll need to pay for the number of days in the financial year that you did not hold the coverage.

In relation to hospital products: Each hospital treatment has a Schedule Fee – a price the government believes is fair. Medicare pays 75% of this, while your health insurer pays 25%. If your specialist only charges this Schedule Fee, you won’t incur any out-of-pocket expenses – or ‘no gap’.

If instead your specialist charges above this fee, you’ll have to pay the extra amount not covered by Medicare and your private health insurance.

In relation to extras products, this is where the provider doesn’t charge of the available extras benefit for the service paid by the fund, resulting in no out-of-pocket expenses for the customer.

When you’re admitted to hospital as a private patient, you will have to pay a lump sum of money to your private health insurer. This could be owed once per admission, or once per calendar or membership year. Choose a more expensive excess, and your premiums will be cheaper (and vice versa).

Hospital insurance can (depending on the level of cover) cover your treatment as a private patient for birth-related services. These can include pregnancy, labour, post-natal care, C-sections, in-patient obstetrician care and private room accommodation (should it be available). You must hold cover for 12 months before you can claim on these services.

Importantly, not all private hospital insurance policies cover birth-related services. Gold policies, as well as some with a ‘plus’ designation (e.g. Silver Plus), can include this coverage.

A private hospital policy may cover assisted reproduction services to a limited degree for services where the patient is treated as an in-patient (i.e. you must be admitted to a hospital) or is admitted for day surgeries. This could include infertility tests, IVF and GIFT (e.g. egg collection or embryo transfer).

Pensioners can get enormous value from health insurance, especially since Australians aged 65 and over accounted for 43% of hospitalisations in 2018-19.¹

However, it’s not as simple as saying ‘all pensioners need cover’, so much as they should all consider cover. For anyone thinking about taking out private health insurance, questions should be asked:

• Am I comfortable sitting on a public waiting list for treatment? With private hospital cover, you can avoid public waiting lists and start your recovery sooner. For procedures like, for example, elective bypass heart surgery, it can be an enormous relief to get treatment as soon as possible.
• Would I spend less on extras cover than I would on out-of-hospital treatment? A smart cookie will find an extras policy that helps them pay for a greater portion of the out-of-pocket costs on the things they need (e.g. eyeglasses, dentist appointments), while not paying any more than they were before getting cover.
• Does my state/territory pay for all emergency ambulance transportation costs? Ambulance cover differs depending on which state or territory you live in. In most states, though, your Pensioner Concession or Health Care Card may entitle you to free ambulance transport. It’s worth checking your state/territory’s ambulance service to see whether you’re eligible and take out either health insurance that covers ambulance costs or standalone ambulance cover if you’re not. It can cost hundreds, if not thousands of dollars for a trip to the hospital, otherwise.

Whether pensioners need private cover or not, it will never cost them more to be insured because of their age. The only price differences come from the choice of policy, state and whether a government rebate, loading or discount applies (in addition to the base premiums).

^{1 Australian Institute of Health and Welfare – Admitted patients. Accessed July 2020.}

Whether private health insurance is worth it will depend a lot on who you are and your priorities. If you’re at a stage of your life where you could do with a little bit of peace of mind and prefer to have options and choice about how you’ll be treated in hospital, private cover is well worth considering.