Do I need private health insurance?

Working out if you need health insurance isn’t hard. Try this 1-minute quiz to help you figure out if you need health insurance.

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Public healthcare vs private health insurance

Health insurance isn't compulsory for Aussies with access to Medicare. If you're enrolled in the public scheme, you can access free treatment in a public hospital. Despite that, almost half of the country - 44.2%, according to APRA figures - has some private health cover.

Three key benefits of health insurance are:

  • You can access more treatment options, such as your choice of doctor (where available).
  • You can get shorter wait times than in public hospitals.
  • You can enjoy better hospital services, such as a private room while you're being treated.

With a private plan, you can bridge the gap between Medicare coverage and the expense of other healthcare needs. And you can choose to be treated in either a private or a public hospital depending on your circumstances.

However, health insurance does cost you more than Medicare. There are also a number of exclusions and restrictions on benefits to be aware of. For example, if your hospital stay lasts more than 35 days, you may be considered a long-stay patient, meaning you could receive a lower benefit towards your hospital accommodation.

When does it make sense to get health insurance?


You want additional cover

Medicare doesn't cover ambulance transport. Most private health insurance policies include emergency ambulance cover so you can focus on your recovery and not have to worry about being hit with a large bill. Private health insurance can also pay for treatments not covered by Medicare, including optical, dental, and private pregnancy treatments.


You're turning 31 soon

As soon as you turn 31, you'll be hit with the Lifetime Health Cover loading. This government penalty adds 2% on your health premium for every year you don't have hospital cover. Read more on the Lifetime Health Cover loading in our guide - plus, find a basic hospital plan from as little as $73.85 per month (as of May 2021). Getting in early will save you from unnecessary costs in the future.

Piggy Bank

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. The cost of the levy is more than some hospital cover, so it's possible to save money at tax time with a basic policy. Find plans that will exempt you from MLS.

3 more reasons to get health insurance

1. You can make savings while you spend on everyday health needs.
Whether it's a new pair of specs, keeping your teeth sparkling or even a remedial massage on the weekend, extras cover gives you attractive discounts on a range of treatments.

2. You have more options when it comes to your mental health.
Whether you need short or longer-term support with your mental health, some of the cost of your treatment can be picked up by your insurer if it's covered by your health plan. If you have more urgent needs, you may access hospital psychiatric services immediately on the private system by using the Mental Health Waiver. It can be used once in your lifetime without having to service the usual two-month waiting period on your hospital cover.

The government has brought in extra funding for the provision of mental health services following the COVID-19 outbreak. It's now possible to access up to 20 psychology sessions per year, as part of a mental health care plan. Previously, this only covered 10 sessions – rebates are available to all on Medicare.

3. You don't want to wait around for hospital treatment.
Most countries would look at Australia's public health system with envy. However, wait times can be very long for public elective surgery. Recent figures from Australian Institute of Health and Welfare (AIHW) show the average wait time on public hospital waiting lists for elective surgery was stubbornly high at 39 days. With hospital cover, you can get around the public queue and claim back for those surgeries you require.

When is private health insurance not worth it?

The government actively wants people to take out private health cover. But it's worth weighing up both sides of the public and private debate before you settle on the best option for you.

  • You may like the public system. If you don't mind what doctor you see or what hospital room you get, and you can afford to wait for whatever procedure you need, you may not need insurance at this time.
  • It might not be the best financial decision for you. If you'd be paying $1,000 a year for insurance but only claiming a few hundred on physio or new glasses annually, you might want to cut the extras policy for now.
  • You feel like you're being pressured into unneeded cover. Just because the ads on TV say you need a private fund in case anything goes wrong, remember that the public health system can still provide high-quality care. Be sure to only buy insurance if it makes sense for you.

What different types of health insurance are there?


Hospital only

This covers hospital-based expenses. Hospital cover can get you treated in a private hospital and help pay for it. It also helps you avoid long waiting periods for surgery.

Learn more


Extras only

Extras cover pays for medical costs outside of a hospital like optical, dental, phusio, psychology and chiropractic care. Polcies are customisable for your personal needs.

Learn more



A combined policy includes hospital and extras. Bundling these with a single fund can often save you money, but not always - sometimes separate policies is the way to go.

Learn more

How much does health insurance cost?

Finder research has shown that a basic private hospital plan costs an average of just $79.86*. These starter plans will usually offer ambulance cover and include some common treatments like dental surgery. At the other end of the scale, gold hospital plans cost $170.90 on average. These top-end policies typically include cover for pregnancy, IVF and weight loss surgery.

Extras cover can range from around $12.85 to $81 per month on average depending on the level of cover you choose.

Remember that private health insurance costs vary from fund to fund. A more comprehensive policy with extras is likely to increase your premiums. Your age, your lifestyle and where you live are just some of the factors that an insurer will take into account when working out the cost of your insurance. Another factor that'll affect the cost of private health cover is whether your policy is a single plan, or a joint or family policy.

*All prices quoted are based on a single policy in Sydney, earning less than $90,000 with a $500 hospital excess from August 2020.

Compare your options from 30+ health funds

Health insurance can vary quite a lot, both on price and cover, depending on your needs. That's why it's always a good idea to shop around by comparing private health insurance from a range of providers to find the right fit for you.

More guides on Finder

Save on your health insurance

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22 Responses

    Default Gravatar
    EmmaMay 6, 2019

    I’m 33 and earn less than $90,000 as a single person. I took out private health insurance before I turned 31, and I’m thinking of cancelling my policy as I find it an unnecessary expense. Is it worth having for someone who earns minimum wage? Thank you.

      Avatarfinder Customer Care
      ZahraMay 7, 2019Staff

      Hi Emma,

      Thanks for reaching out.

      I hear what you’re saying, health insurance can seem like an unnecessary expense. The good news is since you earn under $90,000 a year, you don’t need to have it, particularly if you’re healthy. Having said that, since you’re over 31, if you cancel your health insurance and decide to get it later down the line, you’ll pay more for it. This is called the lifetime health cover.

      It’s also good to remember that while Medicare is free, it doesn’t cover everything (in many states, for instance, you’d have to pay out of pocket for an ambulance in case of an emergency). You might find our guides on public vs private healthcare and facts about Medicare useful as you make your decision.

      Hope this helps – best of luck!


    Default Gravatar
    BiancaMarch 19, 2019

    Just wondering what’s the best cover for families but I need Psycologist and Psychistrist as well dental optical and I’m 53 I’m on Medibank top and extras 70 can’t afford this as it’s going up to $578😖

      Default Gravatar
      NikkiMarch 20, 2019

      Hi Bianca,

      Thanks for reaching out!

      Have you had a look through our comparison tool? This will allow you to filter health insurance providers based on what’s a priority for you and your family, or you can simply sort by price across over providers. For example, you may want to prioritize some extras over others or mix and match your hospital and extras policies.

      You can find that from our health insurance page. It can hopefully give you a bit more insight into the options available or you can check out our pages on health insurance and psychology or psychiatry for more info.

      Hope this helps!


    Default Gravatar
    GiosueAugust 2, 2018

    Should I have an insurance at my age?

      Default Gravatar
      JoelAugust 2, 2018

      Hi Giosue,

      Thanks for leaving a question on Finder.

      No one plans to get sick or hurt, but most people need medical care at some point. Health insurance can help cover these costs and offers many other important benefits. Essentially, it’s a safety net to protect you from unexpected, high medical costs. You might find our pages on private vs public healthcare, health insurance in your 20s, 30s or for seniors to be helpful (we’re working on the rest!)


    Default Gravatar
    JosephineJune 5, 2018

    Does any health provider have a no wait period for extras cover including psychologist/counselling the moment I can’t afford a lot? At the moment do not have health cover.

      Avatarfinder Customer Care
      JeniJune 6, 2018Staff

      Hi Josephine,

      Thank you for getting in touch with Finder.

      Just like hospital cover, you’ll need to serve a waiting period before you are able to lodge a claim for extras services. While each fund is different, for physiotherapy, the typical waiting period is two months. In your case, you may need to search for promotions that may waive waiting periods. You can check our page for no waiting period health cover to know our tips to finding health insurance with no waiting periods.

      I hope this helps.

      Have a great day!


    Default Gravatar
    reenaMarch 29, 2018

    Hi being single parent, its very hard for me, with 2 adults age 21 and 23, myself, I pay 226 and then we will have the increase. Not sure what which one to pick

      Default Gravatar
      NikkiMarch 29, 2018

      Hi there Reena!

      Thanks for your questions – I can understand why it’s important for you to check the cost of your cover to see if you can find a better deal.

      The good news is there are lots of options, each health fund offers different combination depending what’s important to you.

      Have you had a look through the comparison tool? This will allow you to filter funds based on what’s a priority for you and your kids. Or you can simply sort by price across over 30 funds. For example, you may want to prioritise some extras over others or mix and match your hospital and extra policies.

      You can find that here: – it can hopefully give you a bit more insight on the options available.

      Best regards,


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