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What is excess in health insurance?

You need to pay an excess when you make a hospital claim, but it can also lower your insurance premium.

What you need to know

  • The excess is an extra cost that you need to pay whenever you make a hospital claim.
  • How big your excess is is up to you - a bigger excess will result in a lower premium.
  • Most funds only require you to pay one excess per person per year, twice on family cover.

What is a hospital insurance policy excess?

A hospital excess is a payment you need to make when you're admitted to hospital. You'll be required to pay this amount upfront when you go to hospital – they will then bill your insurer for the remaining costs.

Some insurers require you to pay an excess every time you're admitted to hospital, while others others cap the amount at a maximum limit per year.

Pros and cons of a higher excess


  • The higher the excess you pay, the lower your premiums will be.
  • You only need to pay an excess if you're admitted to hospital.
  • You usually don't have to pay an excess for same-day surgery, even though your premium is lower.


  • You might also have to pay a co-payment, a daily amount paid towards your hospital stay.
  • If you're a high income earner and you choose an excess over $750, you might have to pay the Medicare Levy Surcharge.
  • If you can't pay your excess when you're admitted to hospital, you might not receive cover.

Why compare health insurance with Finder?

  • We don't ask for your phone or email to see prices.

  • 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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When don't you need to pay an excess?

Day Surgery

Day Surgery

Many funds don't charge an excess if you need to go to hospital for just day surgery.

Accidental injury

Accidental injury

If you're hospitalised because of an accident, most insurers will waive the excess requirement.

Child dependents

Child dependants

Most health funds waive the excess for kids being treated in hospital as an incentive for taking out family cover, and they'll continue to provide cover for dependent children until they reach the age of at least 21.

Excess vs gap payments

Hospital insurance doesn't cover every cost you'll have to pay in the private system. Suck, we know. What's worse is the excess is only one of the out-of-pocket costs most commonly associated with private hospital cover. The other big one is the gap payment.

In short, the gap payment is the different between the cost of a medial procedure and the amount that you are compensated for it by both your insurance fund and Medicare. For most treatments, Medicare will pay a little bit, and your insurance fund will pay the bulk of what's left. However, the final amount the cover can vary by A LOT. Some procedures can be fully covered, while others will leave you literally thousands of dollars out of pocket.

The government has a great website called Medical Costs Finder that can help you estimate how much a particular procedure might cost you. You can also call your health fund directly to get a more specific estimate.

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