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Is private health insurance worth it?

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

Do you need health insurance?
What's your relationship status for tax?
How many kids or dependents do you have?
What's your household income before tax?
How old are you turning this financial year?
Are you thinking about having a baby soon?

Your results
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.
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!
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.
Hang tight, we're finding relevant health insurance options for you!

What you need to know

  • Private health insurance is available to Australians, but it is not mandatory.
  • Without health insurance, Australian citizens can still get most treatments for free through the public health system, Medicare.
  • The private system has some benefits over the public system, as well as some potential tax advantages.

When does it make sense to get health insurance?

Thankfully, nobody needs to get health insurance in Australia since we have access to Medicare. However, there are some situations where it may make sense to get.

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. If you don't use your extras consistently though, it might not be worth having a policy all year round.


You earn over 90k

The Medicare Levy surcharge (MLS) is a government levy of up to 1.5% on your income if you earn more than $90,000 (or $180,000 for couples) and don't have private health cover. If you earn $90,000, you'll pay around $75 more tax per month and $181 if you earn $145,000 or more. That money goes towards the public healthcare system. If you'd rather not pay that tax, you can avoid it with a basic hospital policy – they cost around $80 a month.

Lifetime health cover loading

You're turning 31 soon

When you turn 31, a 2% Lifetime Health Cover loading (LHC) is added to your health insurance premium for every year you don't have hospital cover. That fee accumulates, so if you don't take out cover until you're 40, you'll be hit with a 20% loading. It also stays in place until you've held hospital insurance for 10 years. This seems like a big additional expense but AMA data suggests it may still be just as affordable if you don't take it out until later in life.


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.


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. That choice may matter to you. If you're happy with a shared ward and any doctor though, insurance may not be worth the money.

Did you know?
Medicare doesn't cover ambulance transport, except in Tasmania and Queensland, but most private health insurance policies do. If you don't want cover for anything else, you can get ambulance-only policies from $1.50 a week.

Finder survey: How many Australians in different states understand how health insurance works?

Source: Finder survey by Pure Profile of 1006 Australians, December 2023
Data for ACT, NT, TAS not shown due to insufficient sample size. Some other states may also be excluded for this reason.

Pros and cons of private health insurance


  • 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 90k or more a year.


  • 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.

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.

What different types of health insurance are there?


Hospital only

This covers expenses in a private hospital. There are 4 levels of insurance: basic, bronze, silver and gold. All must cover specific treatments.

Learn more


Extras only

Extras cover pays for medical costs outside of a hospital e.g. optical, dental, physio, psychology and chiro. Policies are very customisable.

Learn more



A combined policy includes hospital and extras. Bundling these with a single fund can sometimes save you money, but not always.

Learn more

Why compare health insurance with Finder?

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  • With 1 click, you can open your results to nearly every fund in Australia.

  • You pay the same price as going direct – we charge no fees.

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Written by

Gary Ross Hunter

Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full profile

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