Trying to decide if Basic hospital insurance is enough, or if you should opt for Bronze, Silver or Gold tiers? We’ll take you through everything you need to know about Basic health insurance in Australia.
But first, why do these tiers exist?
To make health insurance easier to understand, the Australian Government introduced private health insurance reforms in 2019, which required health funds to categorise their hospital products into four different tiers: Basic, Bronze, Silver and Gold.
The tiers are classified by how many clinical categories they cover (each clinical category includes certain hospital treatments), with higher tiers covering more clinical categories than the lower ones. In order to meet the classification, the product must include all of the clinical categories required for that tier (e.g. if a policy does not include ‘brain and nervous system’ or ‘joint reconstructions’ as a minimum category inclusion it can’t be classified as bronze). Insurers can also offer ‘plus’ or ‘+’ tiered policies, which include some of the categories of a higher-level tier but not enough to enter that tier (e.g. a Basic plus policy might include ‘brain and nervous system’ and ‘joint reconstructions’ but none of the other categories that are a minimum requirement for a bronze policy).
What is Basic health insurance?
Basic health insurance is the lowest level of hospital cover a fund can offer. These policies will have limited features and the most exclusions, but offer basic hospital cover, known as restricted cover ^, for hospital psychiatric services, rehabilitation and palliative care as a private patient in a public hospital.
This means that you are only covered to a very limited extent. If you want to be fully covered for a broader range of services with breaking the bank on premiums, consider comparing some Basic plus and Bronze tiered policies through our free comparison tool.
What does Basic health insurance cover?
Basic health insurance policies will include (at a minimum) restricted^ hospital cover for the following three clinical categories:
- Hospital psychiatric services. Hospital treatment and care for patients with psychiatric, mental, addiction or behavioural disorders, including psychoses like schizophrenia, mood disorders like depression, eating disorders and addiction therapy.
- Rehabilitation. Hospital treatment for physical rehab of a patient related to surgery or illness, including inpatient/day patient rehab, stroke recovery and cardiac rehabilitation.
- Palliative care. Hospital treatment for quality of life care for a patient with a terminal illness, including treatment to alleviate and manage pain.
In some states, Basic level hospital policies may also come with ambulance cover, which can pay towards emergency ambulance services if your state government does not already cover you.
How does Basic health insurance compare to the other tiers?
Compared to higher tiers, Basic health cover in Australia covers the fewest hospital treatments.
A standard Basic policy is only required to include restricted^ private hospital cover for three clinical categories out of 38 total. This is 18 fewer clinical categories than the Bronze tier and 26 fewer than the Silver tier. Meanwhile, Gold tier policies cover you for all 38 clinical categories.
If you want to be covered for more hospital treatments but don’t want a higher tier policy, you may be able to find a health fund that offers the treatments you want on their Basic Plus policy.
What is a Basic Plus policy and what does it cover?
If a health fund chooses, they can offer Basic Plus or + policies, which cover more than a standard Basic health cover policy. Basic Plus policies can include additional restricted^ or unrestricted* Basic hospital cover for one or more of the 35 clinical categories that are usually only found in higher-tiered policies.
However, this means a Basic Plus policy may cost more than a standard Basic policy. Depending on your health insurance needs it may be better to consider a Bronze tier policy which could be better value for money than a basic plus policy in some circumstances.
What isn’t covered under Basic health insurance?
|Clinical categories||Is it covered?|
|Hospital psychiatric services (restricted^)||✔|
|Palliative care (restricted^)||✔|
|Brain and nervous system||X|
|Bone, joint and muscle||X|
|Chemotherapy, radiotherapy and immunotherapy for cancer||X|
|Diabetes management (excluding insulin pumps)||X|
|Ear, nose and throat||X|
|Eye (not cataracts)||X|
|Hernia and appendix||X|
|Kidney and bladder||X|
|Male reproductive system||X|
|Miscarriage and termination of pregnancy||X|
|Tonsils, adenoids and grommets||X|
|Back, neck and spine||X|
|Heart and vascular system||X|
|Implantation of hearing devices||X|
|Lung and chest||X|
|Medically necessary plastic and reconstructive surgery||X|
|Podiatric surgery provided by a registered podiatric surgeon||X|
|Assisted reproductive services||X|
|Dialysis for chronic kidney failure||X|
|Pain management devices||X|
|Pregnancy and birth||X|
|Weight loss surgery||X|
Who might suit Basic tier cover?
A Basic tier policy would suit those who are taking out hospital cover purely to avoid the Medicare Levy Surcharge (MLS) or Lifetime Health Cover loading (LHC). For example, it may suit higher income earners, who are happy to rely on Medicare (Australia’s universal health care system) for their hospital care.
Is Basic health insurance worth it?
Basic level health insurance policies are the lowest level of hospital cover a fund can offer, which means Basic health insurance in Australia may be worth it if:
- You’re looking for the lowest and most restricted level basic health insurance coverage
- You want to avoid paying the MLS or LHC.
However, as it has limited benefits, Basic hospital cover may not be worth it if you require cover for additional hospital treatments. If this is the case, a Basic Plus, Bronze or even a higher tier may be more worthwhile.
Can I get a Basic level of extras-only health insurance?
The government reforms regarding the classification of health insurance only apply to hospital products. However, there continues to be a full range of extras cover options available, including entry-level products. Lower-level extras policies usually come with lower annual limits and higher out-of-pocket expenses. Because of this, you might actually save more on a higher level of extras cover, depending on how often you take advantage of the services offered to you.
Although, it’s worth noting that extras-only policies can’t include the name of any metal, gemstone or semi-precious stone in their product name (e.g. Diamond or Platinum extras are no longer allowed). However, some combined policies (hospital and extras) may be named Basic hospital cover and extras.
What does Basic health insurance cost?
The base premium of a Basic health insurance plan will depend on your state, which health fund you’re with and what’s included in your policy. Basic health insurance policies will generally cost less than higher tiers (e.g. Bronze, Silver or Gold health insurance), as it typically covers fewer hospital treatments.
However, if you have a Basic Plus hospital policy, it may cost more than higher tiers. A simple way to find out how much a Basic health insurance plan might cost is to compare policies online.