Cost of private health insurance

These figures are based on the monthly premium for single-only hospital policies with an excess of $750 that exempts you from the Medicare Levy Surcharge (MLS). They don’t include rebates, discounts or loadings. ‘Plus’ tiered policies have been included within the four main tiers (e.g. Bronze Plus policies are included in the Bronze tier, and Silver Plus policies are included in Silver). For more information on how ‘Plus’ policies work, refer to our guide to health insurance tiers.

These figures are based on the monthly premium for single-only policies and don’t account for different dollar and percentage limits or the services provided.

Unlike private hospital cover, which is divided into tiers based on the hospital treatments covered, extras insurance policies vary in the general treatments covered (e.g. physio or dental) and how much they will pay toward them.

Unlike many other insurance products, health insurance is community-rated. This means your age, gender, health status and other risk factors do not influence the base premium you pay.

However, several other factors can influence the amount you’ll pay for your health insurance cover, such as:

• Your excess
• Where you live
• The level of cover you choose
• The private health insurance rebate
• The age-based discount
• Lifetime Health Cover (LHC) loading.

Read more about what influences the cost of health insurance.

Traditionally, every year on 1 April, many insurers increase their private health insurance premiums. In recent years, many health funds have deferred these increases to give COVID-19 savings back to members. These private health insurance premium increases adjust for:

• Increased health care costs (i.e. hospital and doctor’s fees)
• An increase in claims made
• More complex and expensive medical equipment
• Higher costs for complex medical treatments.

Before increasing their premiums, insurers must seek approval from the Australian Department of Health to ensure any cost changes are necessary, reasonable and fair.

In simple terms, taking out a joint couples health insurance policy is the same as taking out two identical single policies, except that you only pay one premium. Because of this, the most significant benefit of couples’ health insurance is convenience, not cost.

While a couples policy might not lower your total base premiums, depending on the age and income of you and your partner, it is possible that a couples policy would affect your eligibility for the Australian Government rebate.

For example, the singles income threshold for the rebate is $144,000, and the family threshold is 288,000, so if you earn $150,000 annually you might not qualify for a rebate as a single. However, if your partner earns less than $130,000, you might qualify for a rebate on your combined family income.

When you’re treated through the private health care system, you may still have to pay some of the medical costs out of pocket, even if your health insurance policy helps to cover your treatment.

When you’re admitted to hospital as a private patient for a treatment listed on the Medicare Benefits Schedule (MBS) and covered by your insurance policy, Medicare will typically pay for 75% of the MBS fee, and your health fund will pay 25%. However, because the hospital and doctors are allowed to charge above the MBS fee, you may have to pay the difference between the MBS fee and the total cost of your treatment; this difference is commonly referred to as ‘the gap’.

You may be able to avoid or minimise the gap through your health funds gap cover scheme. For more information on how the gap works, see our guide to gap payments here.

The excess is an amount you pay upfront when you’re treated as a private patient for a condition covered by your private health insurance hospital policy. Depending on your policy, you will usually only have to pay the excess on your first hospital admission for the year.

When you take out a health insurance policy, you can typically elect to pay a higher premium in exchange for a lower excess. Or, if you think it’s unlikely that you’ll be admitted to hospital, you could choose a higher excess and pay less in premiums.

Unlike an excess, a co-payment is a fixed amount you pay for every day you’re in hospital. The amount payable is usually capped up to a maximum amount payable annually or per admission.

It’s vital that you’re aware of any excess and/or co-payments on your policy when you sign up for private health insurance to help you avoid unexpected expenses when you’re admitted to hospital. Talk to your health fund or refer to the relevant policy documents for more information.