Looking for hospital only health insurance? Compare policies from Australian funds and save.
Private health insurance is split up into two separate types of policies: hospital cover and extras cover. While extras cover helps you pay the cost of general treatments like dental, optical and physio, hospital cover is designed to cover the cost of a wide range of in-hospital procedures. It also covers accommodation either in a private hospital or as a private patient in a public hospital, allowing you to choose your doctor and in many cases skip lengthy public hospital waiting periods.
You can take out hospital or extras cover on their own or choose to combine these two types of cover into one comprehensive health insurance policy. This article will explain the key benefits of private hospital only cover.
Compare your hospital health insurance options from 35 funds
Learn more about the different types of hospital policies
Crucial steps to compare private health cover
- Level of benefits included on your policy. All providers will have a number of different funds with varying levels of cover to choose from. While cheaper, basic policies obviously won't offer the same level of protection as the more comprehensive plans. Some funds will also offer additional cover options so you can tailor your policy closer to your needs.
- Excess or co-payments applied. Some funds will contain an excess and co-payment. The excess is the price you will pay when admitted to a hospital, regardless of long you will stay. The co-payment is paid for every day that you spend in hospital. These charges vary from fund to fund so it's crucial you know exactly what you will be paying. While having a no-excess policy will save you in the event of being admitted to hospital, it will reflect a higher premium rate.
- Ambulance cover. Whether or not you are covered for ambulance transport will vary from fund to fund. Some funds will include it under the hospital only cover while others will offer it under Extras cover. Ambulance cover is also available as Full (100% cover for land, sea and air transport) or Emergency Only (Ambulance trips that are deemed an emergency by the paramedics).
- Health fund gap. In the event you are admitted to hospital, Medicare will cover 75% of the charge and private health insurance will cover the remaining 25%. However, if your doctor or specialist charges above this amount you will be required to pay for this GAP (difference between fee charged and Medicare benefit schedule. Find out how to avoid the gap in the section below.
- How much you are actually covered for. You will need to determine exactly how much of your hospital bills will be covered under your policy. For example, while a top-level policy will cover 100% of your hospital bills, others may only cover a much smaller amount or require you to make a co-payment (up to an annual limit) for every night you spend in hospital.
- Hospitals covered under your policy. You will need to find out what hospitals you are entitled to receive treatment at under your policy. While basic cover may only offer treatment as a private patient in a public hospital, higher-level policies can provide you with a private room in a private hospital should you ever need it.
- Private hospitals you are entitled to. Not all private hospitals will be covered by your fund. Many funds strike up arrangements with private hospitals, which can limit your choice in certain parts of the country, so make sure to examine a full list of hospitals that have an agreement with your health fund.
- Treatment at other hospitals. Also consider the cover provided if you receive treatment in a non-agreement hospital, and if you live in a regional area it’s vital that you choose a fund that has an agreement with a local hospital. Failing to do so can result in you incurring significant expenses and enduring substantial inconvenience travelling to your nearest agreement hospital to receive treatment.
- Exclusions on your policy. As with any other form of insurance, it’s also crucial that you take any restrictions or exclusions that may apply into account. Certain procedures, such as coronary bypass surgery or any procedure for which Medicare does not pay a benefit, are commonly excluded from cover. Other services are covered to a limited extent, while some policies may place limits on the amount of time for which they will pay a benefit.
Other issues to consider include whether you will be covered for a single or shared room, as well as the fact that private health funds cannot provide cover for long-stay patients. If you’re hospitalised for more than 35 consecutive days, you’ll be classified as a long-stay or nursing home patient and will have to cover the cost of hospital accommodation out of your own pocket.Back to top
What does Private Hospital Insurance cover?
Most private health funds will offer three levels of hospital insurance — comprehensive, medium and basic — to suit the budgets and cover requirements of a wide range of people. While a basic hospital policy will cover the cost of a limited range of in-hospital treatments as a private patient in a public hospital, top-level policies cover a much broader range of procedures and can provide access to a private room in a private hospital.
Cover obviously differs between providers but a top hospital policy will typically include the following benefits:
- Private hospital. Cover as a private patient in a private hospital, allowing you to choose both your hospital and your doctor.
- Ambulance services. Cover for emergency ambulance treatment and transport when you are taken to hospital.
- Shoulder and knee reconstructions. This includes investigative surgery and operations to repair ligament tears, extract loos tissue and fix any other damage.
- Appendicitis. This covers you when you are hospitalised for appendicitis and also for the cost of having your appendix removed.
- Tonsils and adenoids. Cover for removal of tonsils and adenoids.
- Removal of wisdom teeth. Hospital charges incurred for the surgical removal of wisdom teeth will be covered under a comprehensive policy.
- Colonoscopies. Cover for Endoscopic examination of the large bowel and the distal part of the small bowel.
- Palliative care. If you have a life-limiting condition, the resulting health care costs will be covered by your policy.
- Psychiatric treatment. From addiction problems to diagnosed psychiatric disorders, any resulting hospital costs are covered.
- Rehabilitation. This includes the cost of any approved exercise, physical therapy and rehabilitation programs.
- Heart services. This includes cover for open heart and bypass surgery, angiograms, the insertion of stents and hospital stays.
- Obstetrics services. Regular and caesarean childbirths are covered, along with inpatient pregnancy services such as diagnostic imaging.
- Fertility treatments. Treatments under the IVF and GIFT programs are covered.
- Plastic and reconstructive surgery. While surgery for cosmetic purposes is typically not covered, surgery to repair deformities or improve function following a traumatic injury or caused by a congenital defect are covered.
- Major eye surgery. This includes treatment for vision loss caused by cataracts and other eye conditions.
- Hip and knee replacement surgery. All other joint replacements are also typically covered.
- Renal dialysis. The cost of treatment resulting from kidney failure is also covered.
- Other hospital services. All other in-hospital services and procedures where Medicare will pay a benefit.
How does hospital only cover compare with what is offered by Medicare?
|Medicare||Private hospital insurance|
|Doctor and hospital|
|Hospital and medical costs|
Compare what is covered by health funds and medicare by using the table at the end of the article.
What level of cover do I need?
There are typically three levels of hospital policy available in the Australian health insurance market, so let’s take a look at what is covered by each option and who it is suitable for:
This is the most affordable level of cover and is typically suitable for those who are young, fit and healthy and have few medical problems. It’s also ideal if you simply want to take out the cheapest cover available in order to avoid paying extra tax. However, many Basic Hospital policies restrict cover to treatment in a public hospital only and also exclude a wide range of treatments and conditions, including:
- Pregnancy services
- Assisted reproductive services
- Cataract and eye surgery
- Cardiac and cardiac-related services
- Non-cosmetic plastic surgery
- Gastric banding
- Hip, knee and joint replacements
- Dialysis for chronic renal failure
- Palliative care
- Psychiatric care
Medium Hospital policies are a little more expensive than basic policies but offer a higher level of cover. They’re often suitable for people who want to enjoy the tax benefits of hospital insurance, and who want a combination of a broad range of benefits and affordable premiums. However, mid-level policies still restrict or exclude a range of procedures, including:
- Pregnancy services
- Assisted reproductive services
- Major eye surgery
- Hip, knee and joint replacements
- Dialysis for chronic renal failure
If you want the peace of mind offered by the highest level of hospital protection available, this is the policy for you. Top Hospital policies cover private hospital treatment for all services where Medicare pays a benefit. While these policies do attract the most expensive premiums, if you choose a policy with an excess and/or a co-payment option you can lower the cost of premiums to a more affordable level.
What is generally excluded from hospital only cover?
Many private health insurance funds may not provide cover for the following:
- Assisted reproductive services such as IVF.
- Major heart operations.
- Psychiatric services
- Surgery or hospital treatments for which Medicare does not offer a benefit.
- Long-stay patients. You will be classed as a long-stay patient if you are hospitalised for more than 35 days.
- Services provided outside Australia.
- Services that are not provided face to face.
- Some high-cost medications.
- Cosmetic surgery which is not medically necessary.
- Prostheses that are over the value of approved benefits on the Government’s Prostheses list.
As mentioned, exclusions and restrictions can vary greatly from one policy to the next. Once you understand all the exclusions and restrictions that apply to your policy, it’s a good idea to review your cover every year to ensure that it still matches your health needs. You can also upgrade to a higher level of cover that includes services you think you may need in the future.
However, if you require a treatment or service that your policy does not cover discuss your treatment options with your doctor or consider how you can pay for the cost of treatment yourself.Back to top
What is the difference between hospital and extras cover?
Hospital health insurance is designed to cover the expense of any inpatient services and treatment you receive in hospital. You can take hospital only cover out as a standalone policy or combine it with extras cover to enjoy a much broader range of cover.
Extras cover, also known as ancillaries cover, provides protection for a range of general treatment options you are more likely to need on a day to day basis. These include things like optical, dental and physio treatments, with providers typically covering the cost of such treatments up to an annual benefit limit per person.
You can choose basic extras cover which, as the name suggests, offers a basic level of cover for common general treatments. However, you can also opt for a higher level of extras cover which provides more generous annual benefit limits and also includes things like major dental, orthodontics, podiatry, speech therapy, remedial massage, myotherapy, acupuncture and a range of natural therapies.
The purpose of extras cover is to help you look after and improve your overall health and wellbeing without significantly impacting on your bank balance.Back to top
When you start a new private health insurance policy or opt to increase the level of your existing cover, you will have to serve a waiting period before you can access any benefits under your policy. Waiting periods are designed to keep health fund membership costs down by preventing people from joining a fund, making a large claim and then cancelling their membership.
The Australian Government sets a maximum limit on the waiting periods that Australian health funds are able to impose. The waiting periods listed below are typically imposed by most funds:
- 12 months for pre-existing conditions. This refers to any conditions, illnesses or ailments you had during the six months prior to taking out a hospital policy or increasing your level of cover.
- 12 months for pregnancy services (obstetrics). If you plan on falling pregnant, you’ll need to take out an appropriate level of hospital insurance for yourself and your newborn well ahead of time so that you can serve the 12-month waiting period and then access the necessary benefits.
- Two months for specific conditions. These include psychiatric care, palliative care and rehabilitation.
- Two months in all other circumstances. This waiting period applies to all other hospital treatments and services.
Waiting periods also apply to the benefits available under extras cover, but these waiting periods are set by individual health funds. Make sure you’re aware of any waiting periods that apply before you purchase health cover.Back to top
What's the Lifetime Health Cover loading?
In an effort to encourage people to take out private health insurance cover and keep it in place for the rest of their lives, the Australian Government introduced the Lifetime Health Cover scheme. Under this scheme, Australians must contend with an extra 2% loading on their private health insurance premiums for every year over the age of 30 that they do not have private health insurance cover in place.
This means that people who take out private health cover before they turn 30 and maintain their policy will pay lower premiums across their lifetime than those who don’t. And if you take out cover after your 31st birthday, you’ll need to pay a premium loading for every year after you turned 30 that you did not have any cover in place.
It’s important to note that this lifetime loading applies to hospital policies only and not to extras cover. But when you take this loading into account, it quickly becomes clear that it makes better financial sense to take out private health cover before you turn 30.Back to top
What you need to know about the Medicare Gap Scheme
If you’ve done any research into private health insurance you will have heard "the gap" or "the medical gap" referred to quite frequently. The gap refers to a situation when your doctor charges a fee that is higher than the Medicare benefit schedule — for example, when you receive a $100 medical bill and Medicare covers only $75 of the total bill.
The Medical Gap Scheme is designed to offer financial assistance to help you cover the cost of private medical treatment. Many private health funds run a Medical Gap scheme to help you meet the cost of medical services, so before you undergo treatment it’s a good idea to ask your doctor if they participate in your particular health fund’s Medical Gap Scheme.
Doctors can choose three approaches to covering the gap:
- They can participate in ‘No Gap’ health cover. If your doctor participates in your health fund’s No Gap scheme, you will not have to pay any out-of-pocket expenses for the cost of treatment.
- They can offer ‘Known Gap’ cover. You will be charged a capped fee to cover the cost of the gap.
- They can choose not to participate in Gap cover. If your doctor is not a part of your fund’s Medical Gap Scheme, you’ll need to cover all costs not covered by Medicare.
Cheapest hospital only policy per provider to avoid the MLS
If you earn more than $90,000 per year and you do not have an appropriate level of private health insurance in place, you’ll need to pay extra tax thanks to the Medicare Levy Surcharge (MLS). This surcharge means high-income earners will have to pay an extra 1-1.5% in tax, and it’s designed to reduce the stress on the public health care system by making it beneficial for more people to take out private cover.
In order to avoid paying the MLS, you must take out a hospital policy with an excess of no more than $500 for singles, and no more than $1,000 for families and couples. You will also need to join before 1 July and keep your cover in place for a full financial year.
Nearly every Australian health fund offers a basic hospital policy designed to be as affordable as possible but help you avoid paying the MLS. Find out what the cheapest policies are to avoid the levy hereBack to top
Some final questions you might have
Q. What's the Medicare Levy Surcharge?
- A. The Medicare Levy Surcharge is an additional tax of 2% on the Medicare Levy that is charged to taxpayers who earn above certain thresholds and do not have private health cover in place. This initiative is put in place to encourage more Australian's to have private health cover in place to release pressure from the public system.
Q. Is it straightforward to transfer between health funds?
- A. Yes. If you are switching to a new fund with the same or a lower level of cover, you do not have to re-complete the time that has already elapsed on the waiting period. You must transfer within the specified period of time for your chosen health fund. This can be anywhere between 2 weeks to 2 months.
Q. If I don't have cover already, will I have to undergo a waiting period?
- A. Yes. All funds apply waiting periods to new members that do not already have cover in place. Waiting periods will generally be between 2 and 12 months for conditions requiring hospitalisation.
Q. How can I pay less for hospital only cover?
- A. You can reduce the premium you pay for cover by choosing a basic policy with a higher excess charge. If you are considering taking out reduced cover, it is crucial you know exactly what you will be covered for and if it's really worth not paying extra for a higher level of cover. It's worth finding a flexible option that allows you to add/remove benefits so you can tailor cover closer to your needs and budget.
Q. Is private health insurance compulsory if I am over 30?
- A. Private cover is not compulsory if you are over the age of 30 but if you do not apply for cover by the 1st of July following your 31st birthday, you will be charged the LifeTime health cover charge in addition to premium on private cover you purchase later.
How much is the loading?
The loading is an additional 2% on each year following age 31.
Q. Will I be charged the Lifetime loading if I have just become a permanent resident and am over age 31.
- A. Yes. You have one year from the date that you registered for Medicare to take out private health cover and avoid the Lifetime loading.
Benefit payments will vary from provider to provider and will also be different depending on the treatment. A breakdown of payment amount by procedure and insurer can be found here:
|Basal Cell Carcinoma or Squamous Cell Carcinoma removal from nose, eyelid, lip, ear, digit or genitalia||$221.35||$335.85||$311.85||$366.10||$315.80||$303.15||$296.90||$265.65||$265.65|
|Breast, benign lesion surgical biopsy of excision||$260.05||$355.20||$367.25||$356.40||$380.55||$355.30||$348.80||$312.10||$312.10|
|Carpal Tunnel Release||$276.80||$459.05||$426.80||$440.20||$453.75||$404.90||$417.55||$332.20||$332.20|
|Complicated Delivery (of baby)||$1,629.35||$2,649.15||$2,307.90||$1,855.90||$2,406.65||$2,198.50||$2,280.10||$1,955.20||$1,955.25|
|Coronary Artery Bypass||$2,200.00||$3,665.20||$3,404.40||$3,783.30||$3,294.85||$3,265.15||$3,064.80||$2,640.00||$2,640.00|
|Femoral on Inguinal Hernia||$464.50||$640.60||$657.50||$909.70||$662.70||$636.05||$623.05||$557.40||$557.40|
|Overnight investigation for sleep apnoea||$588.00||$747.65||$707.85||$682.20||$703.45||$694.25||$709.40||$705.60||$705.60|
|Tonsils or Tonsils and Adenoid||$295.70||$522.05||$493.85||$513.90||$481.30||$472.35||$442.65||$354.85||354.85|
|Uncomplicated Delivery (of baby)||$693.95||$2,150.35||$1,979.05||$1,484.50||$2,057.05||$1,886.95||$1,550.60||$832.74||$832.74|
I recognise most of these funds except for the AHSA, what is that?
The funds represented by the ASHA are:
- ACA Health Benefits Fund
- Australian Unity Health Limited
- CBHS Health Fund Limited
- CUA Health Limited
- Defence Health
- GMF Health
- Budget Direct Health Insurance
- Frank Health Insurance
- GU Health
- HBF Health Ltd
- Health Care Insurance Limited
- Health Insurance Fund of Australia Limited
- Health Partners
- Navy Health
- Peoplecare Health Insurance
- Phoenix Health Fund
- Police Health Limited
- Queensland Country Health Fund Limited
- Reserve Bank Health Society Ltd
- rt health fund
- Teachers Health Fund > UniHealth Insurance
- Teachers Union Health
- The Doctors' Health Fund Pty Ltd
- Transport Health