What is private health insurance?

Health insurance helps you cover the cost of private hospital treatments as well as some out-of-hospital services, such as benefits for dental. When choosing your health insurance, you can pick hospital, extras cover or a combined policy with both.

There are some key differences between Medicare and private health insurance.

Private Health Insurance Reforms

There are big changes to health insurance coming April 1. Here are 5 things you need to know.

Private health insurance options

It's up to you to decide what type of private health insurance you'd like cover for:

Hospital only

A hospital policy covers you for hospital procedures and accommodation, you can also choose your doctor. Hospital cover is also what you need to avoid the Medicare Levy Surcharge (MLS).

Health insurance hospital cover

Extras only

Extras cover allows you to claim for out-of-hospital health services such as dental and physio. Extras pay either a set refund or a percentage refund.

Health insurance extras cover

Combine Hospital and Extras

A combined policy includes cover for both in and out of hospital services. They are often labelled as packages such as young couples - but you can also mix and match your own.

Combined Packages

The benefits of getting private health insurance

Need joint surgery?

Skip the wait lists and get some cover ready for the rehab.

Visiting the dentist?

Whether you’re looking for a clean or need some major work.

Like health discounts?

Cover for physio, chiro, remedial massage and some gym rebates.

Planning for pregnancy?

Choose your hospital and obstetrician with top level cover.

Turned 31?

If you don’t have cover, you’ll face increased prices.

Earn over $90K?

Get hospital cover to save on taxes or face the Medicare Levy Surcharge.

How much does health insurance cost?

The Australian Government has introduced a number of schemes to encourage people who can afford private health insurance to take it out. Private health care takes the burden off the public health system so people who really need it can access it when they need to. There are a few schemes that may impact you.

• Lifetime Health Cover (LHC) loading. This is designed to encourage Australians to maintain health insurance from a younger age. It does this by increasing premiums by 2% for every year after your 31st birthday that you don't have cover.
• Medicare Levy Surcharge (MLS). This is an additional tax penalty ranging from 1% to 1.5% of your annual income, depending on how much you earn, and is applied every year that you do not have an adequate private health insurance policy.
• Private health insurance rebate. One of the major benefits of having private health insurance is being able to claim the private health insurance rebate. The rebate is determined by your age, your relationship status and your income.

Yes, you can. Australian health funds offer a range of cover options for those moving to Australia. These policies are called Overseas Visitors Health Cover (OVHC) or Overseas Student Health Cover (OSHC). The type of cover you need will depend on your visa. However, people from countries that Australia has a Reciprocal Health Care Agreement with can access a certain level of subsidised treatment from Medicare. Be aware that the benefits are very limited, with anything but the most vital medical services likely not covered.

Reciprocal Health Care Agreement countries

How to compare health insurance

Each health fund is different, policy prices, services covered, annual benefit limits, excess options and sign up offers can vary. Follow these key steps when comparing:

• Think about your requirements.Tailor your search to your budget and lifestyle.
• Find out what services you're paying for. Make sure you're not paying for things you won't use.
• Shop around. Don't just go with the brand you know the most, you may end up paying more.
• Consider all the costs. Remember to check excesses, limits and co-payments.
• Know what the annual benefit limits are. Extras apply benefit limits to many included services.

Health Insurance Frequently Asked Questions

• Health Insurance funds to choose from

  • ahm
  • Australian Unity
  • ACA
  • Apia
  • Bupa
  • CBHS Members
  • CDHF
  • CUA
  • Defence Health Limited
  • Doctors Health Fund

  • Frank
  • GMF
  • GMHBA
  • GU Health
  • HBF
  • HCF
  • HealthCare
  • Health.com.au
  • Latrobe
  • Members Own
  • MyOwn

  • Mildura health fund
  • Navy Health Fund
  • Nurses and Midwives
  • onemedifund
  • Peoplecare
  • Police Health
  • Phoenix
  • Qantas Insurance
  • Queensland Country

  • RBHS
  • RT Health
  • Suncorp
  • St.LukesHealth
  • Teachers Health
  • Transport Health
  • TUHealth
  • UniHealth
  • Westfund

• What health cover do i need for an overseas visa?

  • Overseas Student Health Cover (OSHC)
  • OVHC (Overseas Visitors Health Cover)
  • Insurance for overseas medical costs
  • 457 visa health insurance
  • 456 and 400 visa health insurance
  • 417 visa health insurance

  • 408 visa health insurance
  • 405 visa health insurance
  • Health insurance for expats
  • TSS Visa Health Insurance
  • Health insurance for tourists [600 Visa]
  • Health insurance for parents visiting Australia

  • Visitor health insurance for 601 visa holders
  • 489 visa Health Insurance
  • 485 Visa health insurance
  • Bridging visa health insurance
  • Reciprocal Health Care Agreement

• How do I find health insurance for specific treatments?

  Compare your options in our guides designed for specific treatments:

  • Drug and alcohol treatments
  • Psychiatric care
  • Psychology
  • Dental Insurance
  • Major Dental
  • Dental and Oral Surgery
  • No gap dental
  • Optical
  • Eye care
  • No-gap optical
  • Major eye surgery
  • Physiotherapy

  • Gym benefits
  • Pregnancy
  • IVF and assisted reproductive services
  • Baby health insurance
  • Cosmetic surgery
  • Weight Loss Surgery
  • MRI scans
  • Joint replacement
  • Sterilisation
  • Breast reduction

  • Sex reassignment surgery
  • Pathology tests
  • Elective surgery
  • Acupuncture
  • Appendicitis
  • Remedial massage
  • Nicotine replacement therapy
  • Blood pressure monitors
  • Joint Fluid Replacement Injections

  • Orthotics
  • Cancer
  • Prostheses
  • Orthodontic treatment
  • Insulin pumps and diabetes
  • Naturopathy
  • Endodontic services
  • Natural therapies
  • Palliative care

• Can health insurance be ported?

  Yes. By law, in Australia you can transfer any wait periods you’ve already served for hospital cover. For your extras, there are no guarantees by law but many insurers will waive the waiting periods in a bid to sign you up.

• Can health insurance companies refuse to insure you

  No. The private Australian healthcare system is based on a system of “community rating”, meaning that insurers are not allowed to turn customers away based on their health status, claims history or age. This gives all Aussies the care they need and while also helping to take pressure off of the public system.

• Is health insurance tax deductible?

  That’s affirmative! If you earn less than $140,000, your rebate could be as much as 34% of the amount you spent on insurance. You can choose to claim that back on your taxes or to apply it in your premiums to get a discount as you go.

• What health insurance do i need for tax?

  If you want to avoid the Medicare Levy Surcharge (which is a surcharge on your taxes once you earn over $90k), you will need to have private hospital cover provided by a registered Australian health insurer. It must have an excess of $500 or less for singles or $1,000 or less for families.

• What is the difference between medicare and private health insurance?

  Medicare is the Australian government's public-run health care system, funded by taxpayer dollars and providing free healthcare to all citizens and permanent residents.

  Private health insurance is a privately-run system that works side-by-side with Medicare by taking some of the pressure off the public system and by offering patients more choice. People who buy private health insurance have the benefit of being treated by the doctor of their choice and in a private hospital, neither of which are possible with Medicare.

  Because the two systems are designed to work together, Medicare will still pay a portion of the private patient’s costs.

• What happens if i don't have private health insurance?

  If you don’t have private health insurance, you will still be covered by Medicare but you’ll have a little less choice about who treats you and you may run into some tax issues. Medicare by itself does not let you choose where you are treated or who treats you, and you could wait a while in the long public queue before you can get treated.

  High earners without private cover have to pay a Medicare Levy Surcharge in addition to the Medicare Levy everyone pays. Anyone who waits until after they’re 31 to buy private cover will also be penalised with the Lifetime Health Cover loading if they ever decide to buy it. For most people, this increase is equal to 2% per year after the age of 31.

• What is excess in health insurance?

  Your excess is the amount of money you agree to pay each time you’re admitted to the hospital or get treated as an outpatient. Generally speaking, the higher your excess is, the lower your premium will be if everything else about the policy is the same. Don’t get this confused with your co-payment, which is the amount of money you agree to pay for each night you spend in a hospital. Think of it this way: your excess is your share of the treatment costs and your co-payment is your share of the accommodation costs.

• When does health insurance reset?

  You health insurance will come with benefit limits, or the amount of money you can claim back for each treatment, and those reset once per year. It’s up to your insurer to decide when those reset, but it will most commonly be at the start of the financial year or the start of the calendar year. Your best bet is to check with your insurer or read up on your policy documents.

• Why do health insurance rates go up?

  There are three main reasons health insurance prices go up every year. One, more and more people are downgrading their policies to the minimum required to avoid taxes. Two, year-on-year growth in the number of new policies is slowing industry-wide. Three, Australia’s population is ageing which means more and more people are making claims. Four, the cost of healthcare is rising. All of this together means the funds are receiving less money, yet paying out more. To make up the shortfall, they resort to price hikes.

• How many Australians have private health insurance?

  As of March 2018, there were 11,316,775 Australians (or 45.5% of the population) covered by private health insurance, according to the Australian Prudential Regulation Authority (APRA).

• What is the largest health insurance company?

  BUPA is Australia’s largest health insurance company, with 3.7 million members having some form of health insurance with the company as of December 2017 (APRA).

• Can health insurance be backdated?

  If you get medical treatment while you are uninsured, you can’t later buy insurance and backdate your policy to cover the original treatment. You need to be covered before the treatment, and sit out any waiting periods.

  There is only one exception. If you are already insured under a singles or couples policy, most insurers will let you add your child as a dependent up to a certain amount of time post-birth (usually two months) before you have to let them know. Once you add the child, the child’s coverage will be backdated to their birthdate and everything from their birthdate forward will be covered.

• What are health insurance reforms?

  The health insurance reforms are a set of reforms announced in October 2017 to make it easier for Australians to compare health insurance products side-by-side. It aims to create a simplified tiered structure that rates hospital policies on their comprehensiveness according to four levels: Gold, Silver, Bronze and Basic. Extras policies will be rated similarly, except without the Basic level. The government hopes to have the new system rolled out completely by April 2019. You can find out more about the reforms here.