Do I need private health insurance in Australia?

Try this 1-minute quiz to help you figure out if you need health insurance.

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Ceyda Erem

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Key takeaways

  • Private health insurance is available to Australians, but it is not mandatory.
  • Private health insurance can be worth it if you've turned 31, earn over $105k or want more choice in your healthcare.
  • The private healthcare system has tax advantages over the public system, like avoiding the Medicare Levy surcharge (MLS).

What is private health insurance?

Private health insurance helps to cover the cost of procedures and treatments not covered by Medicare. This can include specialist appointments, dental care, physiotherapy and ambulance cover.

Not sure if you need health cover? Answer 5 quick questions and get a personalised recommendation.

Do you need health insurance?
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Your results
Hospital
You might benefit from private hospital cover. Here's why:
  • It could save you at tax time: Your income is high enough that you're likely to be charged the Medicare Levy Surcharge (MLS). This is an extra tax of between 1% and 1.5% of your overall income, which will be charged at tax time. To prevent it, you'll need to take out at least a basic hospital insurance policy (though we recommend at least basic plus).
  • It will stop you paying more later: Ever since you turn 31, you're eligible for the Lifetime Health Cover loading (LHC). For every year after your 31st birthday, not having hospital cover will add a 2% levy to your premiums when you eventually do take out private hospital cover. Avoid this by getting at least a basic hospital cover policy.
  • You may want private cover for childbirth: If you're planning on having a baby soon, then you might want private hospital cover with childbirth. Private hospital childbirth isn't for everyone, but if it's something you're after, you'll need a gold tier policy at least 12 months before you become pregnant.
You probably don't need private hospital cover right now. Here's why:
  • You're not yet 31, so the Lifetime Health Care loading (LHC) doesn't apply to you yet.
  • You're not earning enough to be hit with the Medicare Levy Surcharge (MLS).
  • You're not looking to have a baby, so you don't need to worry about private childbirth.
  • Despite all that - if you want cover for a good range of hospital treatments in a private hospital - just in case - you might want to consider a Bronze policy. Bronze policies are pretty affordable and cover 18 different treatment categories.
Extras
You might benefit from having private extras cover. Here's why:
  • If you're planning on having a baby, extras cover could give you access to valuable out-of-hospital care. Some extras policies include cover for pre-natal and ante-natal services to give you and bub the best chance of success.
  • Private extras cover helps you pay for a range of out-of-hospital services not covered by Medicare. This can include dental checkups and surgery, prescription glasses and contact lenses, as well as hearing aids and blood glucose monitors. Best of all, if you are sure you use your extras regularly, it can actually save you money!
Ambulance
You should consider ambulance cover. Here's why:
  • Ambulance callouts aren't covered by Medicare, and only Tasmania and Queensland offer free cover for residents. That means you'll be billed whenever you need an ambulance to a hospital, generally starting at $500 per callout. Luckily, ambulance is often covered with hospital and extras policies - just check the fine print before you buy. Otherwise, you can get standalone ambulance cover from around $60 per year.
  • As a Tassie resident, you're covered for ambulance services within the state. However, you won't be covered for services on the mainland, which can cost more than $500 per callout. Ambulance is often covered with hospital and extras policies, but not always in Tasmania. If you're not covered, standalone ambulance cover starts around $60 a year.
You probably don't need ambulance cover. Here's why:
  • As a Queensland resident, you've covered for ambulance services anywhere in Australia, so you probably don't need private ambulance cover. Ambulance is often covered with hospital and extras policies, but not always in Queensland - double check your health insurance if you ever move interstate.
The health insurance calculator is not a complete assessment of your financial position. It is a general guide only. There are many additional factors unique to each individual that you should take into account. Results are only as accurate as the information entered by the user. We recommend speaking to your financial adviser when considering your financial position and health insurance decisions.
  1. Commonwealth Ombudsman - 2022 State of the Health Funds Report
  2. Finder: Private Health Insurance Rebate
  3. Finder: Lifetime health cover loading explained
  4. Australian Tax Office: Medicare Levy Surcharge & Private Health Insurance
  5. Australian Tax Office: Income thresholds and rates for the private health insurance rebate
  6. Australian Tax Office: Lifetime health cover
  7. Finder: Ambulance cover in Australia
  8. Tasmania government: Ambulance costs if you live in Tasmania
  9. Queensland government: Interstate Ambulance Treatment and Transport Information for Queensland Residents
Hang tight, we're finding relevant health insurance options for you!

Do I need private health insurance?

As the majority of healthcare is supported by Medicare, many Australians wonder how much of a difference private health insurance can make in their lives. Or to put it more frankly, if private health insurance is "worth" the price tag. Here are some scenarios where you might want to consider health insurance:

Simple Extraction

You want extras cover

Medicare doesn't cover out of hospital services such as dental, optical or physiotherapy. Health insurance can if you get extras insurance. Policies start from around $13 a month and a few let you skip waiting periods for things like general dental.

piggy-bank

You earn over $105k

The Medicare Levy surcharge (MLS) is a government levy of up to 1.5% on your income if you earn more than $105,000 (or $210,000 for couples) and don't have private health cover. You can avoid the MLS with a basic hospital policy, which cost around $80 a month.

Lifetime health cover loading

You're turning 31 soon

If you don't have hospital cover by 1 July following your 31st birthday, a 2% Lifetime Health Cover loading (LHC) is added to your hospital cover premium for every year you're over 30 when you take it out. That fee accumulates as you age and stays in place until you've held hospital insurance for 10 years.

hourglass

You want to avoid lengthy waiting times

Public waiting lists for elective surgery are typically much longer than private waiting lists. If you don't want to wait, private health insurance might be a good option. Keep in mind though that if it's a pre-existing condition you're receiving treatment for – for example a bad knee – you'll need to have held cover for 12 months before insurance will cover you.

surgeon

You want your choice of doctor

With private health insurance, you get to choose your own doctor and when you're treated. You can also get your own room in a private hospital, where possible.

Pros and cons of private health insurance

Pros

  • It typically has shorter wait times than in public hospitals.
  • It can pay for out of hospital care such as dental, optical and physio.
  • It covers ambulance transportation, unlike Medicare.
  • You have choice – for example, you choose your own doctor and can get your own private room.
  • There are some tax benefits if you earn over $105k a year.

Cons

  • Basic policies don't cover much and top tier policies are expensive – often around $170 per month.
  • You may have out of pocket expenses – private doctors aren't obligated to adhere to MBS fees.
  • Medicare covers the exact same hospital treatments as private hospital insurance.
  • You need hospital cover if you want to avoid the LHC loading and MLS – extras won't count.

What type of health insurance cover do I need?

When you start shopping around on health insurance policies, you'll find there's generally three types:

  • Hospital only. Hospital only covers expenses in a private hospital. There are 4 levels of insurance: basic, bronze, silver and gold. All must cover specific treatments. According to findings by APRA, 12.5 million Australians (45%) held hospital cover in June 2025.
  • Extras only. Extras cover pays for medical costs outside of a hospital e.g. optical, dental, physio, psychology and chiro. Policies are very customisable, allowing you to only pay for treatments you'll actually use.
  • Combined. A combined policy includes hospital and extras. Bundling these with a single fund can sometimes save you money, but not always.

Did you know?

Did you know 53% of Australians hold private health insurance, and almost half — 47% — say avoiding public hospital waitlists is their main reason for having it, according to Finder's 2026 Health Report? With 23% of Australians skipping medical treatment altogether due to cost, deciding whether cover is worth it often comes down to weighing premium costs against the value of faster access to elective treatment and specialist care when you need it most.

When is private health insurance not worth it?

The government actively encourages people to take out private health cover to alleviate pressure on the public system. However, that doesn't mean it's always the right decision for you. For example, private health insurance might not be worth it if:

  • You are happy with the public system. The ability to choose your own specialist or hospital, or to have the option of a private room and better food, is a selling point for some – for others, it's an additional expense that's not worth paying for.
  • It's costing a lot but giving little in return. If you'd be paying $1,200 a year for insurance but only claiming a few hundred on physio or new glasses annually, it doesn't make much financial sense. You may want to just get extras cover for now.
  • You feel like you're being pressured into unneeded cover. Just because the ads say you need a private fund in case anything goes wrong, remember that the public health system can still provide quality care. It covers the exact same treatments as private health insurance.

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Ceyda Erem is Finder’s senior writer for insurance and has almost 10 years of experience writing about personal finance. Formerly a copywriter for several business and finance clients, Ceyda has written hundreds of articles, guides, blogs and more to ensure Australians stay in the loop about how to best manage their money. She has a Bachelor of Arts, Majoring in Writing from Macquarie University. See full bio

Ceyda's expertise
Ceyda has written 222 Finder guides across topics including:
  • Insurance
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