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Benefits of health insurance

Unsure about what health insurance can offer you? All the benefits of private health cover explained.

Private health insurance is all about peace of mind. It allows you to access the medical treatment you need whenever you need it, giving you the freedom to choose your own doctor and helping you to avoid out-of-pocket medical costs.

However, choosing a policy can be a complex and confusing process, so it’s vital that you do the research and compare your health insurance options before making your final decision.

Compare health insurance policies from Australian providers

Details Features
High Hospital with $0 / $250/ $500 Excess Options
High Hospital with $0 / $250/ $500 Excess Options
Provides a high level of cover for hospital including pregnancy cover and assisted reproductive services.
  • Cover starting from $36.22 weekly
  • Two month waiting period for wisdom teeth
  • 65% back on extras
  • Choice of $0, $250 and $500 excess
Enquire Now More info
Premier Hospital
Premier Hospital
This top hospital policy covers you for a multitude of services as well as 100% of the cost of hospital accommodation and theatre fees in all HCI agreement hospitals and day surgery facilities.
  • Cover for pregnancy and IVF treatment
  • 100% back on surgically implanted prostheses
  • 100% back on hospital prescriptions
  • Access Gap Cover
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GoldStar
GoldStar
Premium hospital cover with complete cover for hospital expenses. Save 4% when you pay for 12 months of your cover upfront.
  • All theatre fees covered
  • Unlimited maternity cover
  • Choose no excess or $200, $400, $500 per admission
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Top hospital 500
Top hospital 500
Top hospital 500 provides cover for a comprehensive range of services from psych to obstetrics to the removal of tonsils.
  • Spinal fusion
  • Weight loss surgery
  • All joint replacements
  • Rehabilitation
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Mid Hospital with Pregnancy
Mid Hospital with Pregnancy
Mid Hospital with Pregnancy covers you for pregnancy and related services in addition to what the standard Mid Hospital policy covers.
  • Pregnancy and related services
  • Nine month waiting period for pregnancy in public hospital
  • 12 month waiting period for pregnancy in private hospital
  • Day surgeries
Enquire Now More info
Premium Family Package
Premium Family Package
This is GMHBA's most comprehensive policy and providing a range of benefits including a pregnancy option.
  • Pregnancy and birth related services
  • Assisted reproductive services (IVF)
  • No hospital excess for kids
  • 100% back on optical
Enquire Now More info
Premium Hospital Cover
Premium Hospital Cover
Comprehensive hospital protection with complete cover including pregnancy.
  • No excess for kids
  • No excess for accidents
  • Cover for pregnancy, heart surgery, joint investigations
  • Free access to health and wellbeing programs
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Top Hospital Cover
Top Hospital Cover
NIB's premier Hospital protection with cover for pregnancy and birth services, obesity surgery and all other benefits covered across other policies.
  • $250 / $500 excess
  • Pregnancy and birth services cover
  • Infertility Investigations cover
  • Renal dialysis cover
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Top Hospital with Top Extras
Top Hospital with Top Extras
Get comprehensive hospital and extras cover and tailor your policy to your needs.
  • Pregnancy and birth services cover
  • Back surgery cover
  • $1000 general dental annual limit
  • $600 physiotherapy annual limit
Enquire Now More info

What are the general advantages of having health insurance?

Some of the main advantages that private health cover offers to all Australians include:

  • Control. If you want to choose the hospital where you’re treated and the doctor who treats you, private health insurance gives you that power.
  • Avoid waiting lists. Private health insurance allows you to gain quicker access to treatment as a private patient and avoid lengthy waiting lists in the public hospital system.
  • Covers what Medicare doesn’t. There are a wide range of out-of-hospital health care expenses that Medicare doesn’t cover, such as optical, dental and physio visits. A private health insurance extras policy allows you to take out cover for these services.
  • Tax benefits. If you have private health insurance cover in place, you can avoid paying more tax due to the Medicare Levy Surcharge if you earn over $90,000 p.a. as a single.
  • Peace of mind. Taking out private health insurance gives you the financial protection you need to cover unexpected medical costs, ensuring that you don’t end up significantly out of pocket if disaster strikes.

What are the specific benefits of each health insurance type?

There are three types of health insurance cover available in Australia with each offering their own unique benefits:

  • Private hospital cover. This provides cover for the cost of a wide range of in-hospital procedures, including cover for hospital accommodation, theatre fees, intensive care, doctor’s fees and in-hospital pharmaceuticals. Hospital cover allows you to choose where you will be treated and select your own doctor, ensuring that you can avoid public hospital waiting lists and receive treatment when you need it. And if your treating doctor charges more for your procedure than the Medicare Benefits Schedule (MBS) fee, private hospital insurance will cover “the gap”.
  • Extras cover. Also called general treatment cover, this health insurance type is designed to help you cover the costs of a wide range of out-of-hospital health care services that Medicare doesn’t cover. This includes optical treatment and eyewear, general and major dental and orthodontics, physio and chiropractic services, remedial massage and much more. High-level extras cover policies also include cover for a range of natural therapies, podiatry and even hearing aids, helping you access a broader range of health care services.
  • Ambulance cover. An essential consideration given that Medicare does not cover the cost of ambulance treatment and transportation for Australians. If you take out a policy that provides ambulance cover, you can ensure that you won’t be faced with an expensive bill for ambulance services following an emergency.

Do health insurers offer policies for different life stages?

As your life changes, so does your health insurance needs. It's for this reason that Australian private health funds design their policies to suit the needs of customers at different life stages. Some common types include:

  • Young singles
  • Couples
  • Families
  • Single parent families
  • Empty nesters
  • Retirees
Depending on your life stage, you can switch to a new policy that suits your changing needs, or customise your existing policy so that you only pay for cover for the services that you are most likely to use.

Does the Government offer any incentives for taking out health insurance?

The Australian Government wants you to take out health insurance because it reduces the strain on the public healthcare system. To encourage more people to take out health insurance, the government introduced a range of incentives and penalties which are:

  • Lifetime Health Cover. Under this scheme, if you don’t take out an adequate level of private hospital cover before your 31st birthday, a premium loading will apply whenever you do take out cover. The longer you wait to take out a policy, the more your health insurance will cost.
  • Private health insurance rebate. This incentive helps reduce the cost of your health insurance premiums.
  • Medicare Levy Surcharge. Penalises with additional taxation for not being covered by private health insurance. The higher your income, the higher the surcharge.

By taking out health insurance cover as soon as possible, you can avoid paying extra tax and claim a rebate to make your premiums more affordable.

Is there anything health insurance doesn't cover?

Even if you take out a high-level hospital cover policy, there are certain services and treatments that cannot be covered by health insurance. On some policies these services receive restricted cover, which means only minimum benefits are paid, and on others they may be excluded altogether. The most commonly excluded or restricted services and treatments include:

  • Cardiac and cardiac-related procedures (heart surgery)
  • Cataract and eye lens procedures (major eye surgery)
  • Assisted reproductive services (IVF)
  • Joint replacements
  • Rehabilitation and psychiatric services
  • Plastic or reconstructive surgery
  • Any services for which Medicare does not pay a benefit
  • Long-stay patients (if you are hospitalised for more than 35 days)
  • Cosmetic surgery that is not medically necessary
  • Some high-cost medications

Check the fine print of your policy to make sure you know which treatments and services are covered, and to what level.

Compare your health insurance options with the aid of an adviser

Picture: Shutterstock

Richard Laycock

Richard is the senior insurance writer at finder.com.au and is on a mission to make insurance easier to understand.

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