What you need to know
- The cheapest hospital cover can be found from around $19 a week.
- There are cheap policies that let you avoid the Medicare Levy Surcharge.
- It also lets you choose your own doctor and can help you avoid long waiting lists.
If you're looking for the cheapest hospital cover available, a basic-tier hospital policies may suit you best. Here are the winners and finalists of the 2023 Finder Health Insurance Awards in the basic hospital insurance category. All will exempt you from the Medicare Levy Surcharge (MLS) and Lifetime Health Cover loading (LHC).
Here's a wide range of hospital policies from Finder partners. You can look for in-hospital benefits that are important to you by clicking "All treatments". Prices are based on a $750 excess for a single person earning less than $90,000 living in Sydney.
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There can be tax benefits if you earn over $90k as a single person or $180k as a couple. You can avoid paying the Medicare levy surcharge with a basic hospital policy.
The Lifetime Health Cover loading is a penalty that applies to anyone who takes out private health insurance after their 31st birthday. The loading increases by 2% for every year you don't have hospital insurance.
Elective surgery waiting times are typically much shorter than public hospitals. Keep in mind though that you'll have to wait 12 months if your condition is pre-existing.
You often get to choose your own doctor, when you're treated and your own room in a private hospital, where possible.
Medicare doesn't cover ambulance transport, except in Tasmania and Queensland. A basic hospital policy can cover you though. There are also ambulance-only policies from $1.50 a week.
If you receive an in-hospital service as a private patient, Medicare typically covers 75% of the Medicare Benefits Schedule (MBS) fee. Your private health cover will pay the remaining 25%.
However, a doctor or specialist won't always stick to the MBS fee set by the government as a fair fee for a service or treatment. In this case, you'd have to pay an out-of-pocket fee known as "the gap".
Some insurers have deals with healthcare providers that mean all or some of the gap is covered by your health fund.
Hospital cover only helps with items that are on the MBS. If the treatment you want isn't on the MBS, you won't get help from private hospital cover.
Why Finder's insurance editor got hospital insurance
My wife and I earn over the MLS threshold and we live in NSW, so it made sense for us to take out hospital insurance. Now we're saving money by having a policy in place, plus we don't need to worry about an expensive ambulance bill anymore.— James Martin, insurance editor.
Each health insurance tier covers a standardised set of treatments. Here's a quick summary of each tier.
Gold-tier hospital insurance covers all 38 treatments outlined by the Australian government. This includes treatments such as joint replacements, pregnancy and insulin pumps as well as all services covered by silver-tier policies.
Average premium:
$218.78
a month for a single policy.*
Lowest premium:
$162.44
a month for a single policy.*
Silver-tier hospital insurance covers at least 26 treatments outlined by the Australian government. This includes treatments such as dental surgery, lung and chest and podiatric surgery as well as all services covered by bronze-tier policies.
Average cost:
$147.89
a month for a single policy.*
Lowest premium:
$102.5
a month for a single policy.*
Bronze-tier hospital insurance covers at least 18 treatments outlined by the Australian government. This includes joint reconstructions, ear, nose and throat and gynaecology treatments as well as all services covered by basic-tier policies.
Average cost:
$98.84
a month for a single policy.*
Lowest premium:
$86.34
a month for a single policy.*
Basic-tier hospital insurance isn't required to fully cover any treatments outlined by the Australian government, but it needs to have restricted cover for rehabilitation, hospital psychiatric services and palliative care. Basic cover is primarily used to avoid the Medicare Levy Surcharge and Lifetime Health Cover loading.
Average cost:
$84.13
a month for a single policy.*
Lowest premium:
$76.9
a month for a single policy.*
*Average prices are updated monthly in line with Finder's database of health insurance policies. Prices are based on a single individual with less than $90,000 income and living in Sydney with a $750 excess.
There are 2 different government schemes that may cost you money if you don't have hospital cover.
If you earn over $93,000 (from 1 July 2023) and don't have hospital cover, you'll be taxed 1%, 1.25% or 1.5% of your wage due to the MLS. Get a cheap policy and you can avoid the tax.
For a lot of people, the cost of a hospital policy can be less than what they'd be taxed if they didn't have it. For example, a single person who earns $95,000 per year would pay an additional $950 in tax if they don't have insurance. But there are plans available on Finder from $76,37 – or $916.44 per year.
So even if you don't plan on using private health insurance, it can make financial sense to get a policy anyway.
LHC loading kicks in on 1 July immediately after your 31st birthday. For every year you don't have health insurance from that date, you'll be charged an extra 2% when you eventually do decide to get a policy.
For example, if you wait until you're 41 to get hospital cover, your premiums will be 20% higher than they would have been if you took out a policy before the deadline. That's assuming you don't have an exemption. Get hospital cover before the deadline and you won't be hit with the penalty.
The main hospital covers and their waiting periods include the following:
Service covered | Typical waiting period |
---|---|
Emergency ambulance cover | 1 day |
Accidental injury benefit | 1 day |
Acute mental health treatment | 2 months – a one-time waiver may apply |
Rehabilitation | 2 months |
Palliative care (for life-limiting illnesses) | 2 months |
Pregnancy and birth | 12 months |
Pre-existing conditions | 12 months |
Waiting periods vary depending on your policy. The services listed here do not represent a complete list of services covered under all hospital policies. Depending on your fund and policy, you may find many other cover options to match your needs.
No matter what level of health insurance you get, there are certain things that won't be covered. They include the following:
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