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• What does private health insurance cost?
• How are premiums decided?
• What is an excess?
• What are out-of-pocket costs?
• Does my private health insurance affect my tax?
• Is private health insurance worth it?
• Where can I find and compare health insurance?

Long story short

Your choice of policy affects your health cover premium

More coverage and more people covered means a higher premium, but the trick is to find a policy that gives you value for money.

Sometimes discounts and loadings apply to premiums

Taking out cover sooner in life can mean you get a discount, whereas waiting until you’re older can come with higher premiums.

Private health insurance can be handy at tax time

Depending on your circumstances and policy, you might get a rebate on your premiums and/or dodge the Medicare Levy Surcharge.

What does private health insurance cost?

For iSelect customers who compared and purchased a policy in 2025, average monthly hospital cover premiums ranged from $114 for a basic singles policy for a male to $404 for a silver couples policy.¹See Average monthly hospital insurance premiums for iSelect customers in 2025 In comparison, average monthly extras cover premiums ranged from $28 for a basic singles policy for a male to $256 for a high-level couples policy.²See Average monthly extras insurance premiums for iSelect customers in 2025

Health insurance premiums can vary significantly between policies and providers, and prices also depend on how many people are covered and the state you live in. Your health history, though, isn’t a factor.

With hospital cover – the kind of health insurance you’ll need if you want to be a private patient and potentially skip public waiting list wait times – a higher tier, like silver or gold, means a higher price. That greater coverage with more clinical categories can be well worth the extra cost, depending on your health concerns and needs. iSelect customers who compared and purchased a basic hospital policy paid a lower average premium than customers who purchased a silver policy.³See Average monthly hospital insurance premiums for iSelect customers in 2025

Extras policies (sometimes called general treatment policies or ancillary cover) are more for your everyday health needs, as opposed to getting joint replacements or heart surgery. Think inclusions like dental, optical or physio.

Basic policies tend to cover general dental – think dental check-ups and cleans only – and optical. Meanwhile, comprehensive or top extras include lots of services, like chiropractic, remedial massage, major dental and more.

As with hospital cover, the more coverage you have on an extras policy, the more you’ll need to pay as a higher extras premium. However, an extras policy that covers more – and means you look after yourself before things get so rough that you need to go to hospital – could be worthwhile.

And you don’t have to choose between hospital and extras cover. Instead, you can go with convenient combined cover or choose separate hospital and extras policies (even from different health funds).

Note: These figures represent the average monthly hospital cover premiums paid by customers who compared and purchased a hospital only policy through iSelect during the period 1 January 2025 – 31 December 2025 for each stated category of cover. Base category only – ‘plus’ policies excluded. Premium data includes Lifetime Health Cover loadings, age-based discounts and private health insurance rebates where applicable. Data retrieved July 2026. Premiums have been rounded down to the nearest dollar.

Note: These figures represent the average monthly extras cover premiums paid by customers who compared and purchased an extras only policy through iSelect during the period 1 January 2025 – 31 December 2025 for each stated category of cover. Data retrieved July 2026. Premiums have been rounded down to the nearest dollar.

How are premiums decided?

Rather than being risk rated (i.e. how likely are you to make a claim), health insurance premiums are community rated, so this means everyone pays the same base price for a particular policy, even if some people may need to claim more often. It helps to stop anyone being discriminated against, like having to pay a higher premium because of their age, claims history, or current health and pre-existing conditions. Having said that, premiums aren’t wholly static. Here are some of the ways they can vary.

Annual rate change

Insurers can change their premiums only once each year. This helps them to cover the rising costs of health care, like more expensive equipment and increased wages for health staff.

Usually, the increases happen across funds as part of the annual health insurance premium change. (It’s a bit ironic that it tends to happen on 1 April, though!) As a result, you might hear people talking about an industry average increase but your premium could be more or less than the number mentioned (or stay the same or even drop).

Lifetime Health Cover (LHC) loading

LHC loading increases your hospital cover premium by an extra 2% for every year after July 1 after you turned 31 and didn’t have hospital cover, up to a maximum loading of 70%. You’ll pay that increased rate, too, for at least 10 years. But even a bare bones policy is enough to keep you free of this loading.

Seems a bit rough? Well, LHC loading is an incentive to get people signing up for private hospital cover sooner rather than later. It’s one of the Australian Government’s hacks to help ease the pressure on the public health system.

Age-based discount

Health insurers have the option to offer premium discounts to younger people to encourage them to sign up for hospital insurance earlier in life. This discount is known as an age-based discount. Age-based discounts work by providing a premium discount for each year that a person is aged under 30, up to a maximum discount of 10%. The maximum 10% discount is available to 18–25 year olds who take out a hospital policy offering a discount.

Insurers are able to continue to offer a yearly discount to those who maintain their discounted policy until they turn 41.

This means that a 25 year old who takes out a policy with a 10% discount and maintains this policy until they turn 41 could be eligible to maintain this discount each year during this period. Just remember that not all funds or policies offer an age-based discount, so if you’re thinking of changing funds, check if your new fund comes with the discount.

The community-rated nature of health insurance means you can’t be discriminated against because of your age – but you can benefit from it with an age-based discount!

Helpful tip

Regularly reviewing your health insurance and comparing other policies is a way you can take some control back over your premiums. While it’s easy to set and forget, a cheaper policy that offers you the same level of cover could be just waiting for you to come find it.

Andres Gutierrez

General Manager – Health

What is an excess?

Your hospital excess is the amount you’ll need to pay towards your hospital bill before you can claim via your health insurance. For instance, you might go in for surgery and rack up a hospital bill for a few grand. If your excess is $500, you’ll first need to pay that $500 before your insurer will pay benefits towards your hospital stay.

You may be able to increase your excess to reduce your premium. A lower excess means a higher premium, while a higher excess means a lower premium. Just be sure to strike the balance of a comfortable premium and an excess you can confidently pay if you need to go into hospital.

What are out-of-pocket costs?

Out-of-pocket expenses are costs that Medicare or your health insurance don’t cover, so they’ll need to come out of your pocket. These could be co-payments for each day you spend in hospital or additional charges that just aren’t covered by Medicare or your insurer (called ‘the gap’), like parts of your doctor’s fees.

Alternatively, you might have reached the annual limit of what you can claim on your extras cover for the year and everything else will need to come out of your pocket – until it all resets again on January 1, July 1 or even on the anniversary of your policy (it’s up to your insurer which date they pick).

Does my private health insurance affect my tax?

Private health insurance affects your tax through the Medicare Levy Surcharge (MLS) and the private health insurance rebate. The MLS can increase how much tax you pay, while the rebate can shrink what you owe.

The MLS is an extra tax based on how much you earn. It ranges from 1%–1.5%. This is in addition to your garden-variety Medicare Levy or 2% of your taxable income that most Australian tax payers pay. However, the MLS only applies to you if you earn above a set income threshold and you don’t have appropriate hospital cover for that full income year.

Choosing to hold private health insurance can also further reduce the tax you owe, thanks to the private health insurance rebate. Your earnings determine how big your government rebate is. While you can choose to wait and claim it at tax time, you can opt for lower premiums throughout the year instead.

Is private health insurance worth it?

Private health insurance may be worth it for people who want to be treated as a private patient in hospital (and enjoy the perks like a private rooms, if available, and choice of doctor) and/or who want to get money back on services that Medicare doesn’t cover, like dental cleans and physiotherapy.

Of course, everyone’s situation is different, so you’re the authority on whether health insurance is worth it for you. But health insurance does have plenty to recommend itself, like:

• getting to choose your treating doctor in a participating private hospital
• avoiding long public wait lists for elective surgery in favour of private hospital treatment
• possibly having a private room in hospital
• claiming some money back on some services not covered by Medicare
• easing the financial burden of preventative health care treatments at the time of treatment.

Where can I find and compare health insurance?

Finding a health insurance policy doesn’t need to be tricky or time consuming. With iSelect, you can compare a range of options from different insurers online, plus purchase one you like, in a matter of minutes. All you need to do is fire up our online comparison tool. Alternatively, you can call one of our health comparison experts on 1800 784 772 to have someone guide you through the process, answering any questions you may have.