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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:

• Avoid public waiting lists for elective surgeries. When you’re treated through the private system, you’re able to avoid often lengthy public hospital waiting lists. Once you’ve served your waiting periods, you could receive treatment in a matter of days or weeks.
• Choose your own doctor and stay in a private room. Depending on availability, you may be able to choose your own treating doctor and recover in a private room when you’re admitted to a private hospital.
• Get cover for out-of-hospital treatment. With an extras cover policy, you can be covered for treatment out-of-hospital that Medicare doesn’t cover. This includes services like dental, physio and chiro.

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.

Extras cover helps you pay for services that aren’t covered by Medicare, like dental treatment and physiotherapy. In some areas, such as optical treatment, Medicare and private health insurance work together. Medicare pays for your eye check and consultation with the optometrist, while your private health insurance helps you pay for your prescription glasses or contact lenses.

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.

A combined health insurance policy includes hospital and extras cover. It can subsidise a wide range of your expenses both in and out of the hospital.

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.

• ACA Health Benefits Fund
• ahm health insurance
• AIA Health Insurance Pty Ltd
• Australian Unity Health Limited
• Bupa HI Pty Ltd
• CBHS Corporate Health Pty Ltd
• CBHS Health Fund Limited
• CDH Benefits Fund
• CUA Health
• Defence Health Limited
• Doctors’ Health Fund
• GMHBA Limited
• GU Health
• HBF Health Limited
• HCF
• HCi
• Health Insurance Fund of Australia Limited
• Health Partners
• Latrobe Health Services
• Medibank Private Limited
• Mildura Health Fund
• National Health Benefits Australia Pty Ltd (onemedifund)
• Navy Health Ltd
• nib Health Funds Ltd
• Peoplecare Health Insurance
• Phoenix Health Fund Limited
• Police Health
• Queensland Country Health Fund Ltd
• Reserve Bank Health Society Ltd
• rt health – a division of The Hospitals Contribution Fund
• St.Lukes Health
• Teachers Health
• Transport Health – a division of The Hospitals Contribution Fund
• TUH Health Fund
• Westfund Limited

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:

• The type of policy
• Your level or cover or tier
• The state or territory where you live
• The rebates and discounts you receive based on your age or income
• Your Lifetime Health Cover (LHC) loading.

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 LHC 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.

• Age-based discount. Some insurers will offer an age-based discount of up to 10% if you take out a policy before you turn 25. The discount you may be entitled to reduces by 2% for each year after your 25^th birthday that you don’t take out a policy. By holding continuous hospital cover with a policy that lets you retain your aged-based discount, you can enjoy the discount until the age of 41. After you turn 41, the discount is phased out by 2% each year until it reaches zero.
• Government rebate. If you qualify, the Australian Government’s private health insurance rebate helps reduce the cost of your premiums depending on your age and income. For example, if you qualify for the highest tier of the rebate, you can potentially receive a premium refund of 32.812%.
• LHC loading. If you don’t take out hospital insurance before the July following your 31^st birthday, you may have to pay an increased premium due to the LHC loading. This is to encourage Australians to take out a policy earlier in life to reduce the strain on the public system.

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.

Cataract extraction

• The average specialists’ fee for this procedure was $2,000
• 54% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $370 on average
• The typical hospital fee for this procedure was $2,400

Cystoscopy

• The average specialists’ fee for this procedure was $1,700
• 52% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $300 on average
• The typical hospital fee for this procedure was $1,700

Cholecystectomy

• The average specialists’ fee for this procedure was $2,800
• 35% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $400 on average
• The typical hospital fee for this procedure was $4,500

Total knee replacement (single)

• The average specialists’ fee for this procedure was $4,800
• 32% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $680 on average
• The typical hospital fee for this procedure was $18,000

Inguinal herniorrhaphy

• The average specialists’ fee for this procedure was $2,000
• 43% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $400 on average
• The typical hospital fee for this procedure was $3,600

Total hip replacement (single)

• The average specialists’ fee for this procedure was $5,000
• 29% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $690 on average
• The typical hospital fee for this procedure was $20,000

Abdominal hysterectomy

• The average specialists’ fee for this procedure was $2,800
• 42% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $500 on average
• The typical hospital fee for this procedure was $6,800

Prostatectomy

• The average specialists’ fee for this procedure was $3,000
• 37% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $500 on average
• The typical hospital fee for this procedure was $4,700

Septoplasty

• The average specialists’ fee for this procedure was $2,500
• 22% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $620 on average
• The typical hospital fee for this procedure was $2,900

Myringotomy

• The average specialists’ fee for this procedure was $1,500
• 31% of patients had no out-of-pocket costs for their doctors
• Those with an out-of-pocket cost for their doctors paid $490 on average
• The typical hospital fee for this procedure was $1,200

Sources:

¹Australian 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