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What does private health insurance cover that Medicare doesn't?

Private health insurance gives you access to similar hospital treatments to what's covered by Medicare – but you get other benefits like your choice of doctor, private rooms, and wait times are generally shorter in the private system, particularly for non-urgent elective procedures. The amount you pay for health insurance depends on the tier of hospital cover you have.

If you're treated as a private patient in a hospital (either private or public), Medicare will cover 75% of the Medicare Benefits Schedule (MBS) fee for services that are listed on the MBS.

Your health insurance may cover the other 25%, plus accommodation costs and theatre fees, depending on your level of cover and provided you have served relevant waiting periods. You will often be out of pocket for costs like the excess, and the gap between the MBS fee and the total cost of your procedure.

Public vs private health insurance comparison

Not sure if private health insurance is worth it? Here are some key differences between the public and private healthcare systems in Australia:

Pros and cons of health insurance

Compare, switch and get rewarded — only on Finder

Comparing health insurance on Finder doesn't just help you find a better deal. We also think you should be rewarded for your effort.
When you purchase an eligible health insurance policy through Finder as a new customer, you could receive a digital Visa gift card as a reward for switching. The value varies depending on the insurer and policy, so it's worth checking what's on offer when you compare.

You can check out the current health insurance rewards we currently have by visiting the Finder Rewards page.

Basic, Bronze, Silver, Gold cover: which is right for you?

• Basic is the entry-level tier. It covers three categories: rehabilitation, hospital psychiatric services and palliative care, but only as restricted cover, which means benefits are limited to the public hospital shared-room rate. It's mainly used to avoid the Medicare Levy Surcharge (MLS) or start building your Lifetime Health Cover (LHC) base rate.
• Bronze steps things up with cover for a broader range of treatments, including joint reconstructions and hernia repairs. It's a popular choice for younger, generally healthy people who want meaningful cover without paying for things they're unlikely to need.
• Silver covers everything in Bronze, plus a wider range of procedures, including back, neck and spine, heart and vascular surgery, lung and chest and dental surgery.
• Gold is the highest tier and covers every clinical category set by the Australian government. That includes pregnancy and birth, joint replacements, cataracts, dialysis, weight loss surgery and insulin pumps.

Which tier is right for you?

The right tier really comes down to your age, health and what you actually want to use your cover for.

A healthy 28-year-old might find Basic or Bronze is all they need. It's enough to avoid the surcharge, and holding hospital cover before their Lifetime Health Cover base day means they'll never pay a loading. If you're planning a family, Silver or Gold with pregnancy cover is worth the investment. And if you're older or managing a chronic condition, Gold's comprehensive coverage may save you more in the long run than it costs.

One thing to keep in mind: Policies within the same tier aren't all identical. Insurers can offer more than the minimum required inclusions, so it's worth reading the fine print and comparing before you commit.

Extras cover explained

Extras cover is the part of private health insurance that helps with everyday healthcare costs outside of hospital, including things like going to the dentist, getting new glasses or seeing a physio.

What's typically included under extras cover?

Most extras policies cover some combination of the following:

• Dental
• Optical
• Physiotherapy
• Chiropractic and osteopathy
• Psychology
• Remedial massage
• Podiatry
• Speech therapy and occupational therapy

The specific services covered, and how much you get back, will vary between policies and insurers. A basic extras policy might only cover dental and optical, while a comprehensive one could include 20 or more services.

Annual limits and waiting periods

Every extras policy comes with two key limitations worth understanding before you claim.
Annual limits cap how much you can claim per service, per year. For example, you might have a $500 annual limit on physio or a $300 limit on optical. Once you've hit your limit for that service, you're paying out of pocket for the rest of the year. Some policies also have an overall annual limit across all extras combined.

Waiting periods are the time you have to wait after taking out a policy before you can make a claim. Unlike hospital cover, extras waiting periods aren't set by legislation. Each insurer chooses its own. General dental and optical are typically two months, while major dental and orthodontics commonly run 12 months or more. Make sure you check the specific waits on any policy before you switch for a particular treatment.

How to compare and choose a health insurance policy in 7 steps

With dozens of health funds and hundreds of policies on the market, knowing where to start makes all the difference. Here's how to find the right option for your health needs:

1. Work out what you actually need: Before you look at a single policy, think about how you use healthcare. Do you go to the dentist twice a year? See a physio regularly? Planning a family in the next few years? Your usage history is the best guide to what cover is worth paying for.
2. Decide between hospital, extras or both: You can take out hospital cover only, extras only, or a combined policy. Hospital cover protects you from big unexpected costs, while extras helps with routine, everyday healthcare.
3. Set a budget: Health insurance premiums vary a lot, so decide what you're comfortable spending per month, then look for the best cover within that range.
4. Compare policies at the same tier: If you're shopping for hospital cover, compare like for like. For instance, two Silver policies can look very different. One might add Gold-only categories, such as cataracts or joint replacements on top of the Silver minimum (often sold as 'Silver Plus') while another covers the 26 Silver categories and nothing more.
5. Read up on the extras limits: For extras cover, the benefit limits matter as much as the list of included services. A policy that covers physio but only pays back $200 a year may not go far if you're a regular visitor.
6. Look at out-of-pocket costs: Some hospital policies use a "gap cover" arrangement with certain doctors, meaning you pay little or nothing beyond your excess. Check whether your preferred hospitals and specialists are covered, and what your potential out-of-pocket costs could look like.
7. Check the fine print on exclusions: Every policy has treatments it won't cover. These are listed in the policy's product disclosure statement (PDS). It's worth skimming, especially if you have a specific condition or procedure in mind.

Our expert says

"A lot of people assume the cheapest policy offers the best value, but that's rarely true. The right cover is the one that actually matches how you use healthcare. Take 10 minutes to think about what you've spent on health costs in the last year before you start comparing. That alone will tell you more than any policy name or tier label."

Ceyda Erem

Senior writer

Our expert says

"Gold hospital cover reaches every clinical category the public system does. Below that, each tier excludes more. The real difference is the standard and speed of care: it's like choosing between a dependable budget car and something flashier. Both get you from A to B, but one is a faster and nicer place to be."

Gary Ross Hunter

Journalist

Expert insight

"I've always been a big proponent of private health cover – and geez I was glad I had it when I was diagnosed with breast cancer in 2021. With any unexpected serious illness, the type of treatment – and crucially the speed of it – could make all the difference."

Nicole Pedersen-McKinnon

Freelance finance journalist

Our expert says

"Health insurance is heavily regulated in Australia, which makes it easier to compare health insurance policies like-for-like. That said, funds still have different products and prices, so it's still important to make sure you're getting the right cover for you and your family."

Tim Bennett

Insurance expert

Changes to the seniors health insurance rebate

The Federal Budget changes announced in May 2026 mean the government's private health insurance rebate for seniors will be cut, though not removed altogether.

Previously, people aged 65 to 69 received a ~28% rebate, and those 70 and over received a ~32% rebate. Under the new change, everyone 65 and older drops to the standard 24% rate.

This change is effective April 1, 2027. The government expects to save around $3 billion over 4 years because of this adjustment.

For older Australians looking to offset the price increase, it's a great time to compare policies and look at switching. Remember that your waiting periods move with you when you move to the same tier/level of cover, so you could pay less without losing any coverage.

Learn more about private health insurance

• Hospital Cover: Hospital cover helps pay for a range of hospital treatments in a private hospital. This can include joint reconstructions, hernia operations and childbirth.
• Extras Cover: Extras cover helps towards out-of-hospital healthcare. This includes trips to the dentist, eye care by an optometrist, physiotherapists, natural therapies and more.
• Health insurance rebate: The private health insurance rebate makes health insurance cheaper for most people. Your exact rebate is determined by your age and income.
• Private health and tax: Whether you're a high earner or turning 30, there are a few things you need to know about private health insurance at tax time.
• Switching health funds: Switching health funds is straightforward. Waiting periods you've already served transfer across on equivalent cover. But if you upgrade to a higher tier or add a service you didn't have, you'll serve a new wait on the extra cover.

I've saved $800 by switching

"Changing health insurance had been on my to-do list for ages, but I found it very confusing. Eventually I compared and took advantage of sign-up offers –by switching health insurers, I've saved around $800 so far."

Alex Holderness

Head of publishing

Frequently asked questions about health insurance

• What is private health insurance?

  Private health insurance can help you cover the cost of medical care in a private hospital (hospital cover) and help pay for out-of-hospital medical costs that aren't covered under Medicare (extras cover). Most private health insurance policies also cover the cost of emergency ambulance transport, which isn't covered by Medicare in any state.

• How does private health insurance work?

  When you take out a private health policy, you have the option of going to a public or private hospital. If you go to a private hospital, or if you're treated as a private patient in a public hospital, your health fund will help cover the cost of care. The main advantages of using the private system are that you can choose your own doctor, get access to improved facilities like a private room, and have access to shorter waiting lists for important surgery.

• What are the hospital cover tiers?

  Hospital cover is available in the following tiers; basic, bronze, silver and gold. Each covers a different list of treatments with gold being the most comprehensive hospital policy available.

• How does private hospital cover work?

  As a public patient in a public hospital you're treated at no cost, under the funding agreement between the federal and state governments, but you don't choose your hospital, doctor or appointment time. As a private patient, Medicare pays 75% of the MBS fee for your doctor's services and your hospital cover pays at least the remaining 25%. If your doctor charges more than the MBS fee, which is common, you pay the difference. Remember, with hospital insurance, you'll also have to serve waiting periods. Insurers can apply a waiting period of up to 12 months for pre-existing conditions. That means anything you had signs or symptoms of in the six months before you joined or upgraded, as assessed by a doctor your insurer appoints. Psychiatric care, rehabilitation and palliative care are capped at two months even when the condition is pre-existing.

• How does private extras cover work?

  Extras insurance helps towards non-hospital-related healthcare, such as dental work, new glasses and physiotherapy appointments. Most extras policies pay a set percentage of your bill, commonly between 50% and 100%, up to an annual limit. Some funds have no-gap arrangements with selected providers where you pay nothing for routine services like a check-up and clean. In other cases, they will cover the whole bill, up to a certain amount. Extras policies also have waiting periods. For example, you often need to hold a policy for a year before you can claim for orthodontics.

• What is a waiting period?

  Waiting periods apply to both extras and hospital policies, and you'll need to serve these before claiming a benefit. Waiting periods can't be skipped, but insurers often waive selected extras waits as a sign-up offer.

• What are extras health insurance annual limits?

  Extras benefit limits place a cap on the amount you can claim. They typically reset every 12 months. A higher limit may mean a more expensive policy, but not always.

• What impacts the cost of health insurance?

  Health insurance is community rated, so insurers can't charge you more because of your health status, claims history or a pre-existing condition. Age does affect what you pay, through factors such as the age-based discount for 18–29 year olds, the Lifetime Health Cover loading if you join after your base day and the age tiers in the government rebate.

  However, here are a few things that can impact your quote:

  • Your excess or co-payment. When you take out insurance, you can agree to take some responsibility for the health cover costs in return for lower premiums – this is your excess. You only pay it if you go to hospital. The higher your excess, the lower your premiums will be.
  • Your state. Premiums are set state by state, so the same policy costs a different amount in NSW than it does in WA. Within your state, insurers can't charge you more for living regionally.
  • Which fund you choose. Some funds and policies are better value than others, charging less for similar cover. If you take the time to compare health insurance, you can find the cheapest health cover for your needs.

• How much does private health insurance cost?

  The cost of private health insurance varies and depends mostly on what level of cover you choose, your age, income and lifestyle. See the health insurance tiers and average costs.

• Do non-residents need health insurance in Australia?

  People from countries that Australia has a Reciprocal Health Care Agreement (RHCA) with can access some treatment from Medicare. If you don't have an RHCA, you'll need Overseas Visitor Health Cover. Australia has Reciprocal Health Care Agreements with Belgium, Finland, Ireland, Italy, Malta, the Netherlands, New Zealand, Norway, Slovenia, Sweden and the UK. Cover under the Italian and Maltese agreements is limited to six months. An RHCA only covers medically necessary treatment, and many visa classes require Overseas Visitor Health Cover regardless. Traveling to Australia without coverage could result in huge medical bills if you are sick or injured.

• How do I find health insurance for specific treatments?

  Thanks to the most recent PHI reforms, which have introduced Basic, Bronze, Silver and Gold tier policies, finding cover for a specific service is easier than ever. Every tier is required to provide cover for specific services so you can check out what is included in each and select the one that covers the treatment you require. Some services often performed out of hospital are only covered when performed in a hospital, like the cost of MRI scans. Our guides for specific treatments have more details:

  • Drug and alcohol treatments
  • Psychiatric care
  • Psychology
  • Dental insurance
  • Major dental
  • Dental and oral surgery
  • No gap dental
  • Optical
  • Eye care
  • No gap optical
  • Major eye surgery
  • Physiotherapy

  • Gym benefits
  • Pregnancy
  • IVF and assisted reproductive services
  • Baby health insurance
  • Cosmetic surgery
  • Weight loss surgery
  • MRI scans
  • Joint replacement
  • Sterilisation
  • Breast reduction

  • Sex reassignment surgery
  • Pathology tests
  • Elective surgery
  • Acupuncture
  • Appendicitis
  • Remedial massage
  • Blood pressure monitors
  • Joint fluid replacement injections

  • Orthotics
  • Cancer
  • Prostheses
  • Orthodontic treatment
  • Insulin pumps and diabetes
  • Naturopathy
  • Endodontic services
  • Natural therapies
  • Palliative care

• What happens if I cancel health insurance?

  If you cancel your health insurance, you won't be entitled to the services you would have otherwise had access to. This means you would have to rely on the medical services provided by Medicare. Note that cancelling your health insurance may also have tax implications, depending on your circumstances.

• Do I have to re-serve waiting periods if I switch funds?

  When you switch health funds you generally won't have to re-serve waiting periods if you had similar or equivalent cover with another provider. However, if you're upgrading or didn't previously have cover for a service that your new policy includes, you will probably have to serve a waiting period.

• Is health insurance tax-deductible?

  Health insurance premiums aren't tax-deductible, but private health cover still affects your tax in two ways. The Medicare Levy Surcharge is an extra tax of 1% to 1.5% that applies to higher income earners who don't hold appropriate hospital cover.

  Medicare Levy Surcharge income thresholds – from 1 July 2026

  From 1 July 2026, the MLS income thresholds are:

  MLS rate	Single income	Couples income
  0%	$0 - $105,000	$0 - $210,000
  1%	$105,001 - $123,000	$210,001 - $246,000
  1.25%	$123,001 - $164,000	$246,001 - $328,000
  1.5%	$164,001+	$328,001+

  Note that the family income threshold is increased by $1,500 for each MLS dependent child after the first child. There are pretty specific rules around what counts as a dependent child for MLS purposes. Check the ATO definitions here if this might apply to you.

• What health insurance do I need to avoid the Medicare Levy Surcharge (MLS)?

  Hospital cover exempts you from the MLS as long as the excess is no more than $750 on a single policy, or $1,500 on a couple, family or single-parent policy. A higher excess than that won't exempt you. Extras cover does not exempt you from the MLS.

Written by

Ceyda Erem

Senior writer

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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 244 Finder guides across topics including:

• Insurance