Extra cover for your medical bills
If you get sick or need ongoing medical treatment, private
health insurance can help reduce the cost of hospital fees and
Here we explain what private health insurance is, how to decide
which cover is right for you, and what to be aware of when making a
What is private health
Private health insurance can help you pay hospital and medical
costs not covered by Medicare. In some cases, you can receive
treatment sooner by electing to be treated as a private
How to choose a private
health insurance policy
Look for a policy that includes the health and medical services
you want. To find out what each insurer offers, read their Standard
Information Statement. You can compare all private health insurers
(or health funds) at the Private Health Insurance
As with all insurance policies, when comparing health funds,
- exclusions and inclusions - private health cover often excludes
claims that relate to pre-existing conditions and specific
procedures, like elective cosmetic surgery.
- restrictions on how much you can claim each year or over a
lifetime for some services.
- waiting periods that may apply for some services.
Types of private health insurance
There are generally three types of private health insurance:
- Ambulance cover
- Hospital cover
- General treatment (extras) cover.
It's important to understand the details of these so you are
covered for the services you need.
Ambulance cover reimburses you for the cost of being transported
by ambulance after an emergency (such as an accident or severe
chest pain, for example). Some state and territory governments
cover the cost of ambulance services for some or all residents,
without the need for private health insurance.
Different funds offer different inclusions in their ambulance
cover. Read the product
disclosure statement (PDS) to find out what your policy
does and doesn't cover.
The Private Health
Insurance Ombudsman website has basic information on ambulance
cover in each state and territory as well as links to state
ambulance services websites.
Hospital cover reimburses you for some or all of the costs of
being admitted to hospital. This can include accommodation in a
public or private room, theatre and intensive care costs. You may
have to pay an excess when you claim on your hospital cover.
There are different levels of private hospital cover - from
basic to top level cover. Each level covers the costs of different
types of treatment, and most funds offer different policies across
these levels. To find out more and compare the different levels
visit the Private Health Insurance
Extras cover is for non-emergency medical treatments received
outside a hospital or as an outpatient. This may include some or
all of the costs of such services as physiotherapy, optical, dental
and home nursing. The amount of cover you get will depend on the
type of policy you choose. Expect to pay more for policies that
cover a wider variety of services.
Comparison websites are useful, but they only include a
selection of health insurance policies, not the whole market. Visit
different funds' websites to compare policy features and ensure you
get the cover you need, at an affordable price.
Some people have to pay an additional surcharge for their health
insurance if they meet certain age or income requirements.
Medicare levy surcharge
Most Australians pay the Medicare levy of 2% of their taxable
income as part of their tax. If you earn more than a certain amount
and don't have private health insurance, you may pay an extra
surcharge of up to 1.5% of your income on top of this.
If you're on a high income, it may be cheaper to buy the
insurance than pay the surcharge. For the latest figures and rules
around the Medicare levy surcharge, see the Australian Taxation
Office's information on the Medicare levy.
Lifetime Health Cover (LHC) loading
The LHC loading is a Government initiative to encourage
Australians to get health insurance before they turn 30, and
maintain the cover as they get older. After age 30, you'll pay
a 2% loading on top of your premium for every year you haven't had
private health insurance, up to a maximum of 70%. You only need
basic hospital cover to avoid the LHC loading.
For example, if you decide to get hospital cover for the first
time at age 40, your loading will be 20% more than someone who took
out health insurance before their 31st birthday (that is, 10 years
x 2% per year). If you keep that hospital cover for 10 years
without a break, the LHC loading will be removed.
The Private Health Insurance Ombudsman has more information on
lifetime health cover
Private Health Insurance Rebate
To help cover the cost of private insurance, the Australian
Government provides a rebate. The amount of your rebate will depend
on your income level. Most people receive their rebate through a
reduced premium, although you can choose to receive it through your
Visit the Private Health Insurance Ombudsman website for more
information on the Private Health Insurance
Why you need to be honest with
your health insurer
You must be completely honest when:
- you take out your health insurance policy
- you make a claim on your policy
- your circumstances change.
If you are not honest, you may not be covered. Your insurer may
not honour any claims if you mislead them about any pre-existing
conditions, for example.
Making a claim on your health
Most health funds require you to make a claim within 2 years of
incurring medical expenses following an accident or illness. Check
what time limits your health fund applies to your level of cover
and type of claim.
Like all types of insurance, deciding whether to
buy private health insurance depends on your personal
circumstances. It's worth taking some time to investigate the
potential benefits for you.
Last updated: 06 Feb 2019