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Written by
iSelect Editorial Team
Edited by
Angela PhungThe purpose of private health insurance is to help with some of the costs related to medical treatment in a private hospital, and out of hospital with private extras providers. Private health insurance can allow you to be treated as a private patient in a public and private hospital, and can help cover some expenses related to ‘extras’ services. Extras can include treatment services such as physiotherapy, dental, optical, and more.
There are three forms of coverage offered:
Private Hospital Cover may give you access to be treated as a private patient in both public and private hospitals. Extras Cover can provide cover for other forms of health care generally not covered by Medicare (Eg: physiotherapy and optical).
Private Health Cover can help you pay for the cost of certain forms of medical care. This medical care can occur when you are being treated as a private patient in a private or public hospital and in a range of out-of-hospital services. To maintain your cover, you need to be a member of a private health fund and have your policy paid up to date.
While there is no “best” health insurance policy it can be important to find a policy that suits your needs and circumstances. At iSelect we compare a range of health insurance policies from nine Private Health Funds, providing side-by-side results, allowing you to select the policy that suits your needs and circumstances.*
Check out our private health funds:
*iSelect does not compare all providers or policies in the market and not all policies or special offers are available at all times, through all channels or in all areas. Not all policies available from our providers are compared by iSelect and due to commercial arrangements and customer circumstances, not all policies compared by iSelect are available to all customers. Learn more.
Although us Aussies have a great public healthcare system, Private Health Insurance may certainly be worthwhile depending on your circumstances. Whether it’s as a result of your life stage or lifestyle or simply planning for the unplannable, Private Health Insurance can not only give you peace of mind, but also a variety of benefits. Private health cover may give you the choice of the medical professional treating you in most circumstances, it can assist with the costs of medical treatments that fall outside of Medicare, it can shorten your elective surgery wait, and also allow you to be treated as a private patient in both private and public hospitals.
In Australia, there are almost 50 private health funds available to service your private healthcare needs outside of Medicare coverage.
Check out the list of private health funds in Australia (as of Oct 2021). Note, iSelect does not compare all health funds or policies in the market:
Source: https://www.apra.gov.au/register-of-private-health-insurers
According to the Australian Bureau of Statistics more than half (56.9%) of Australians had private health insurance in 2019-2020 with the most common type of cover being hospital and extras cover (45%). *
Source: https://www.abs.gov.au/statistics/health/health-services/patient-experiences-australia-summary-findings/latest-release#private-health-insurance
Australia’s health care system is made up of two forms of insurance: private and public.
The Commonwealth Ombudsman generates an annual statement to assist consumers in understanding the performance of their chosen health fund and the delivery of their service. It is also a great source to see how your fund is performing in contrast to others.
Private health insurance can be beneficial if you don’t want to endure prolonged waiting times for elective medical procedures and generally allows you to choose the qualified doctor or specialist of your choice. Private Health insurance could also help with paying for medical expenses such as emergency ambulance trips (depending where you live in Australia) and potentially cover some of the cost of optical, dental, and physiotherapy treatments.
Private Health Insurance isn’t legally required in Australia, however, there are some ways the Australian Government encourages Aussies to give it a go.
Lifetime Health Cover (LHC) is a government initiative which dictates that once someone turns 31 and doesn't have private hospital cover, then that person's future premium can increase by 2% for each year they didn’t have cover post turning 31.
The Medicare Levy Surcharge (MLS) also encourages high-income earners and families to take out private cover once they reach a certain level of earnings. If they don’t take out private health cover, and they fall into certain income brackets, then they could begin paying the MLS. The MLS is an extra tax that is ‘levied’ on your total income, beginning at 1% to 1.5%. The MLS is paid in addition to the Medicare Levy.
Taxable Income reached to be impacted by the MLS:
Choice and peace of mind! Regardless of your age and your lifestyle, life can surprise you with the unexpected. Private Health Insurance can give you some fantastic benefits including jumping the elective surgery wait queue, private patient status not only in private but public hospitals, and the potential to choose your doctor or specialist in some treatments.
There are many factors that play a role in your private health insurance costs.
With our way of life altering significantly over the past few years many Aussies, regardless of age, have begun seeking medical assistance for a variety of health aides to improve their daily activity. Many of us are walking a lot more than we used to, and for that a professional may identify orthotics is beneficial to correct movement issues with our feet. One of the benefits of having Private Health Insurance is the ability to claim some health aides on extras cover policies.
These aids could include (but are not limited to):
In addition, many health funds are recognizing that in some cases activity can help maintain wellness when someone has a diagnosed medical condition. You could claim benefits for gym classes, weight loss, quit smoking classes and other initiatives to improve your health condition.
It is important to consult with both your private health fund and medical professional to see what is required to claim. In most cases a doctor’s note is required and a form to be filled out.
Private Health Information Statements (PHIS) provide an overview of the broad policy features available in private health insurance. The benefit of the PHIS is that it allows the policyholder to review their current policy, and more accurately compare it against other products available in Australia. They are required by law to be accessible to anyone with a private health insurance policy in Australia.
There are three forms of Private Health Information Statements:
Fund Rules are the set of rules that are used to govern your private health insurance policy. The Fund Rules cover the overall terms and conditions of your membership in which all people included in the policy have to follow to maintain a policy and claim on certain services. Fund Rules can alter over time due to governmental changes, and if this occurs, your provider will notify you of such changes. It’s important to note each fund has additional rules above and beyond the government rules, so it’s important to understand which policy and fund may suit you.
A recognised provider is a provider that has met a set of criteria determined by your health fund. Generally, benefits can only be claimed when using the service of a recogonised provider. Recognised providers must work in private practice and have professional qualifications recognized by the health fund in question. This commonly relates to health professionals such as optometrists, physiotherapists, and dentists.
Hospital cover may help with paying for the cost of some of your medical expenses when you are admitted to hospital as a private patient. The types of services which could be covered depends on the level of hospital cover you choose. Hospital cover can help cover some or all of the cost of doctors’ fees, operating fees, accommodation, and intensive care depending on the gap payable by the patient daily.
In many cases hospital cover can give you more choices when it comes to hospital admissions. Generally, private hospital cover gives you your choice of surgeon or treating specialist when admitted and choice of participating hospital where your surgeon practices. The key difference between going private and public is that private hospital helps you in avoiding lengthy waiting lists in the public system.
As regulated by the Australian Government, hospital insurance policies must be categorised in one of four categories. These categories allow for customers to clearly understand the minimum number of services and treatments covered on their respective policies.
These categories are:
If your policy includes coverage for additional items, it may be considered as a ‘Plus’ Policy (Eg. Silver Plus).
If you’re admitted to hospital as a private patient, there may be costs you need to pay to be admitted.
An excess or co-payment are fees you agree to pay as part of your chosen policy which are paid upon admission to hospital. Many customers opt for an excess or a copayment to reduce the cost of their premium.
An excess is a lump sum you pay to the hospital in most cases upon your admission. Most excesses are capped depending on the policy you chose per membership year.
A co-payment (generally a daily charge) is an amount you agree to pay when receiving treatment in hospital or day surgery. A co-payment is usually capped upon a certain number of nights (e.g., you pay the fee for the first seven nights.)
In many cases, there may be other applicable charges known as gap payments, which are paid in addition to the excess or co-payment.
Potentially. In some cases when being admitted to hospital as a private patient, there are times you have to contribute towards the cost of your treatment above the excess. You may experience situations in which your specialist charges more than the pre-determined ‘Schedule Fee’ or MBS fee. If this occurs, you will be responsible for the remaining expenses related to treatment and prothesis known as the “gap”. It is important to remember to ask your medical team, health insurer, and hospital about any potential ‘gap’ costs you may incur prior to admission if possible.
With consideration to hospital cover, each form of treatment has what is known as a ‘Schedule Fee/MBS fee’ established by the Australian Government. In some cases, a surgeon may charge the exact amount set on the MBS which results in ‘no gap’ payment (outside of any applicable excess). In other scenarios the health fund may participate in a ‘no gap’ scheme in order to cover some or all of the gap payment.
It’s important to check with both your surgeon and health fund to understand any potential gap payments. Where a specialist charges over the ‘Schedule Fee’ then you (not Medicare or your health fund) are responsible for any remaining costs.
A Pre-Existing Condition is a condition, sicknesses, or ailment that was existing for a period before seeking or upgrading your cover (as determined by your fund’s appointed doctor). In some circumstances, a pre-existing condition can be determined even if not formally diagnosed. If you have a pre-existing condition, you may still be able to find coverage from your fund after serving a twelve-month waiting period for pre-existing conditions.
An excess is a lump sum paid upon admission into hospital as a private patient, depending on your policy and fund. Depending on your policy, your excess may be owed, once per calendar year, once per membership year, or once per hospital admission.
Simply put, this will depend on your fund and policy. Home nursing has become increasingly relevant for Australians as a result of COVID-19, and as such more and more health funds are offering it. This allows anyone covered by certain health insurance policies to return home from hospital sooner with at-home care.
This at-home care could include nursing, occupational therapy, personal care, physiotherapy, and meal provisions. The benefits of this form of care include more control over your recovery, recovering in a comfortable environment, and no out-of-pocket costs. You will need to check with your fund if your policy can cover these benefits.
As a result of the past few years, some funds are covering rehab and chemo treatments delivered at home. This form of coverage could include at-home nursing, occupational therapy, personal care, physiotherapy, and meal provisions and carry the benefits of recovery in a familiar and comfortable place. You will need to check with your fund if your policy can cover these benefits.
In short yes, depending on your level of hospital cover. There is a 12-month waiting period to claim any form of weight management. Weight management could include gastric bypass, gastric banding, and sleeve gastrectomy. It can also include excess skin removal post weight loss, so it is important to maintain a cover that includes weight loss if this is something you want. Please note, it important to remember this surgery still needs to be deemed medically necessary for it to be covered by your private health insurance.
Yes, private health cover can cover insulin pumps, however you will need to ensure you have an appropriate level of cover and serve the 12-month waiting period to claim. Replacement and repair of insulin pumps also varies between funds so it is important to check how your chosen fund covers these events.
In recent years, some funds are covering more and more preventative tests. They're generally only offered publicly (Eg: at a pharmacy) where a ‘gap’ is charged. Depending on your policy, you may have cover for the following preventative health checks at specific locations:
Specialist outpatient consultations are generally not covered by Private Health Insurance.
As of the 1st of April 2019, people aged between 18-29 years old can receive discounts of up to 10% on their private hospital cover premium on certain products with some providers. This discount is calculated based on the number of years you hold a policy under the age of 30, gaining a 2% discount each year. You may be able to retain this discount until you reach 41 years old.
The Private Patients Hospital Charter provides an outline of your rights and responsibilities as a private patient in hospital. It explains what fund members can expect from their health fund, hospitals, and doctors.
Source: https://www.health.gov.au/resources/publications/private-patients-hospital-charter
Extras cover can help cover part or sometimes all of the cost of certain treatments and services not usually covered by Medicare. Extras cover can include cover for a range of services including dental, optical, and physio treatments.
Extras can be purchased as a standalone policy or combined with hospital cover. Additionally, if you do decide to take out hospital cover and Extras cover, both policies don’t have to be with the same provider.
Each fund will vary their levels of Extras Cover. Depending on your policy, you may be able to receive rebates on the following health services:
The major difference between preventative and routine dental, complex, and major dental lies in the different procedures each category is related to. Here is a breakdown of what could be included in each category, however it is important to note all policies can differ in the way they categorise these services:
Additionally, when it comes to coverage in an Extras policy, a basic type of policy may often only provide cover for preventative and routine dental. For more complex and major dental cover, a medium or comprehensive type of policy is likely to suit your needs better. Additionally, different procedures will come with different benefits, annual limits and waiting periods.
In short, yes, depending on your policy. Braces and other major orthodontic procedures are generally covered on a more comprehensive Extras policies. It’s important to note that there’s often a 12-month waiting period for orthodontic services depending on the policy and provider and you are likely to have some out-of-pocket expense. You also need to attend in person to have a dentist or an orthodontist mold and fit your orthodontic appliance. Online services where you fit your own molds are usually not covered.
Invisalign is a teeth alignment product that functions similar to a mouthguard, and which applies a constant force to your teeth to affect their movement, usually with the goal of straightening your teeth as an alternative to metal braces. Invisalign products are typically clear, lightweight, thin plastic trays which as mentioned, function similar to a mouthguard.
In terms of health insurance, Invisalign could be covered by Extras cover depending on your policy.
Yes, depending on your policy. Treatments like this are typically only covered on Top Extra Cover, and coverage can vary between providers. Porcelain veneers which are fingernail-thin covers added to the front of teeth to enhance both the whiteness and shape of your teeth is considered a major dental procedure, therefore it’s usually only featured on Top Extras Cover policies. If you are looking for something a little less expensive, some funds do cover teeth bleaching in their Extra Cover policies.
Yes, dental implants can be covered under some Extras policies depending on the fund. These are classified as major dental services, and therefore coverage is typically found on Top policies.
Unfortunately, in most cases Medicare doesn’t provide the same level of cover for dental treatment as it does for many hospital procedures. That said, Medicare does provide cover for some essential dental procedures for eligible children and adults.
You can find more information on the Medicare website here:
https://www.healthdirect.gov.au/cost-of-dental-care
Because Medicare offers very limited public dental treatment, and costs for dental treatment can be very expensive (especially for major dental work), Extras cover can be a suitable option for many Australians when it comes to their dental needs.
Each state has their own eligibility criteria for receiving dental treatment in the public health system, and even if you do qualify, you could end up on a lengthy waiting list. Some of the benefits of taking out an Extras policy, which can help cover wisdom teeth removal in the chair, and other dental services, may include:
It’s important to consider if you are going into hospital for wisdom teeth removal you will likely face large out of pocket costs if you don’t have hospital cover.
In health insurance, depending on the service and policy, health funds will likely only cover a portion or a percentage of the cost of certain health services. The difference between what is charged and what your health fund covers is referred to as a ‘gap’ or ‘gap fee’, which you’re required to pay as an out-of-pocket cost.
When it comes to dental services covered by an Extras policy, some funds offer gap-free preventative dental services if you use one of their preferred providers. Depending on the fund, the policy, and their relationship with preferred providers, gap fees could be waived for preventative dental work, such as checkups and cleans.
For example, if you’re a family with several children requiring dental work, those out-of-pocket costs could add up substantially over a year for annual dental work like checkups and cleans. But by taking out Extras with a fund that has a preferred provider network with gap free services, you could save money on these services you know you’ll use annually, as opposed to those ‘just in case’ major dental services that you might only claim on every few years or less.
Yes, private scripts that are TGA approved included and not included in the PBS can be claimed. It is important to remember the cost of the script must be above the PBS to be claimed on your Extras policy. Each fund has different rule around what you can and can’t claim, so it’s important to check with your chosen fund. Some vaccines may also be covered, such as 2 doses of the Meningococcal Vaccine and travel vaccines.
Potentially. Some health funds may cover this or require you to have a medical purpose to claim this form of treatment. Wellness and gym coverage may also be available in policies where this form of activity is considered to be ‘preventative’ towards managing an exacerbation of a diagnosed condition, and prescribed by your doctor.
Hearing aids are typically only covered on comprehensive and high-level cover. It’s important to note that there is typically a 12 to 36 month waiting period before you can claim on hearing aids.
A waiting period when it comes to health insurance is the period of time at the start of your membership before you can claim some benefits and services of your policy. The length of the waiting period can depend on the treatment, your health fund, and your type of cover. For example, waiting periods can differ between extras and hospital cover policies.
You may be required to wait for a particular procedure or service when you;
An example of a waiting period could be that you might take our extras cover to help with the cost of preventative or routine dental care. Before you claim on these benefits, you may be required to wait two months depending on your fund. In regards to hospital waiting periods, these are usually consistent between funds. Most funds have a two-month waiting period for new conditions (Eg: if you had a covered condition that was not deemed pre-existing), and 12 months for all other conditions that are deemed pre-existing, including pregnancy.
One of the key reasons for waiting periods is to protect the health insurance system. If we didn’t have waiting periods, people may sign up to health insurance purely to claim a single benefit before then cancelling their policy following treatment.
In short, you can’t as most health funds will have waiting periods when you first sign up or upgrade your cover.
When you switch health policies or funds to a similar level of cover, the hospital waiting periods you’ve already served are protected by law and you will not have to reserve them. However, if you’re upgrading your plan to include a higher level of cover, you will have to serve waiting periods for those new benefits.
If you’re a bargain hunter, keep an eye out for offers and incentives available from some funds including waiving waiting periods on some extras for new customers. It’s important to note that hospital waiting periods are not typically waived. So if you’re thinking about taking out private hospital cover for a procedure, it’s recommended that you take cover out as soon as possible and start serving those waiting periods.
Any hospital waiting periods already served are protected by law when you switch to the same level or a lower level of cover. Generally, an existing member will be asked to serve waiting periods for hospital cover when they upgrade their cover to include new services. Additionally, if cover is allowed to lapse, has been cancelled, or particular services removed for a period of time waiting periods will need to be re-served. With extras, most funds will also honour any waiting periods already served, however unlike hospital cover, they are not bound by law to do so. When you upgrade your extras, you will have to serve any waiting periods to claim the higher benefits, or new services on your cover.
The amount of time you have to wait before being eligible for various extras services will depend on the health insurance provider and the policy.
Below are some typical waiting periods for extras services but remember, the waiting periods differ depending on your policy and provider:
Depending on your fund, some basic treatments may not require waiting periods. Check the policy brochure of your chosen fund to ensure you have a clear understanding of the waiting periods that apply to your policy.
Broadly speaking, pregnancy cover may provide you with flexibility, choice, comfort, and continuity of care. Your decision to go private or public will depend on your situation, needs, and expectations around continuity of care during your pregnancy, as well as for the birthing procedure, and aftercare. It’s important to know that pregnancy is covered within the public health system, and for obvious reasons, you don’t go on a public waiting list to access pregnancy services unlike many other procedures. That said, there are some key differences between going public and private for your pregnancy.
One of the key benefits of private pregnancy cover is the ability to choose your own obstetrician and have them provide ongoing support throughout your entire pregnancy. In the public system, you generally won’t have one dedicated obstetrician supervising your pregnancy, and instead see the doctor or midwife available at the time of your appointment and birth.
During a private check-up with your obstetrician, you will likely have a quick ultrasound scan of your baby however, a scan is generally only offered to public patients at weeks 12 and 20, depending on the patient's medical circumstances.
Comfort is another deciding factor for private patients, as private hospitals generally allow for better accommodation and facilities, such as private rooms, the ability for you to have a longer fixed stay in hospital compared to going public (even if you have no complications) and additional comfort features like a wider choice of food menu. The public system will likely see you in a shared ward with other patients, and your partner or support person may not be able to stay overnight. It’s important to note in most cases there is likely to be some out-of-pocket cost for pregnancy services. If privacy is important to you, private cover may be an option to consider.
The waiting period for pregnancy and birth related services is generally 12-months before you can claim on benefits. You will have to serve this waiting period if you’re taking out cover for the first time or upgrading you cover to include pregnancy.
If you’d like to be covered for pregnancy, your hospital cover needs to include ‘pregnancy and birth-related services’ at least 12 months before the baby is born. This will help cover pregnancy complications, the birth, and your postnatal care.
Lower cost health insurance policies unfortunately do not usually cover pregnancy, and while your policy will depend on your specific needs, you will require a cover that has the gold clinical category of pregnancy and birth. While rare, in some cases there may be silver plus policies that could cover pregnancy.
We recommend checking with your health fund prior to getting pregnant, and after serving your waiting period, to find out what hospitals are participating with your fund. From there you can start looking at obstetricians that practice at those hospitals. Once you are pregnant, it’s worth letting your health fund know as there may be some additional support and information they can offer you. In particular, it’s important to understand what you need to do when the baby arrives to ensure they are covered.
Pregnancy cover does not automatically cover your baby once it is born, so it's important to understand how to place your baby on your policy. For a variety of reasons, sometimes your baby may be required to spend some time in the special care nursery. This can cost upwards of thousands of dollars if the baby isn’t added to your policy. If you choose not to cover your baby, your baby may be sent to another public hospital for care. By checking with your health fund prior to the birth, you know exactly where you stand, and this gives you one less thing to worry about.
When taking out pregnancy cover, check the requirements of the fund when it comes to placing your baby on your policy. Some providers might require you to have this cover in place for a set period prior to the birth. Other funds may require you to call following the birth to upgrade your cover to a family policy, and have your baby adequately covered.
Generally, we recommend that you take out pregnancy cover a minimum of six months before you plan to conceive, so your baby is born outside of the 12-month waiting period, and you’ll then have full access to all pregnancy services. If your baby is born early and you’re still in a waiting period, the baby and you will both not be covered. Once you’re pregnant, it's too late to take out cover due to the 12-month waiting period that must be served before you can claim on pregnancy benefits.
It’s important note that if you are not buying a gold policy, you must check if your cover has Assisted Reproductive Services included on your policy, as this is different to pregnancy and birth. As with any hospital admission, different health funds have different agreements with IVF facilities as well as certain terms around which services are covered, and to what extent. We recommend understanding exactly what you’re covered for before embarking on your IVF journey.
A small portion of IVF treatments may also be covered by Medicare. If you don’t have private cover, you may however be required to pay even larger ‘out-of-pocket-costs' for your admission for treatment. It’s important to note in most cases there is likely to be some out-of-pocket cost for IVF, which will vary depending on the clinic and treatment.
The Medicare Levy Surcharge (MLS) is an additional tax some Australian taxpayers may have to pay if they don’t have an appropriate level of hospital cover when their taxable income is above a certain threshold. The MLS was introduced to encourage higher income earners to take out private hospital cover to help take the demand and strain off the public health system.
The Medicare levy surcharge is calculated at between 1% and 1.5% of your taxable income, and is payable in addition to the Medicare levy that most taxpayers pay, even if they’re not high income earners. This means that the more you earn, the more you are likely to pay in tax if you don’t have private hospital cover.
For families with children, the threshold increases by $1,500 for each child after the first. For example, after one child your couple threshold goes from $180,000 to $181,500 before you will be charged the MLS as a result of not having suitable hospital cover. If your income is below these thresholds, you’re exempt from the surcharge.
You may have to pay the Medicare Levy Surcharge (MLS) if you don’t have suitable level of hospital cover with a registered health fund (note, extras only cover does not make you exempt from paying MLS) and are a single person with an annual taxable income greater than $90,000 or a couple or family with a combined taxable income of $180,000.
The Medicare Levy is paid by most taxpayers whether they have health insurance or not. It is 2% of your taxable income and helps to fund the Medicare service. This is an additional charge to the tax you pay on your taxable income.
The Medicare Levy Surcharge however, is paid by Australian taxpayers who don’t hold an adequate level of private hospital cover and who earn above a certain income. This is paid in addition to the Medicare Levy.
If you’re eligible to pay the Medicare Levy Surcharge based on your income threshold, the simplest way to help avoid the risk of paying the surcharge is by taking out suitable private hospital cover. It doesn’t need to be top cover (I.e. Gold) - even a Basic or Bronze policy will do.
^This should be treated as general information only, for specific tax advice it’s recommended you speak with an accountant or financial advisor.
Lifetime Health Cover (LHC) loading is a government initiative designed to encourage younger and healthier Australians to take out private hospital insurance earlier in life. If you take out hospital cover before July 1st following your 31st birthday, you won’t have to pay LHC as long as you continue to hold eligible hospital cover.
Customers without eligible hospital cover by July 1st following their 31st birthday who decide to take out hospital cover later in life will have to pay 2% LHC loading on top of their premium for every year they were without cover and pay it for 10 years. The maximum loading is 70%, which means you could be paying a lot more to get the same cover as someone the same age as you who has held continuous cover. It’s a case of the sooner the better in terms of getting hospital cover, not just to reduce your LHC payment, but also to access treatment for the unknown.
For example, if you wait until you are 35 to take out private hospital cover, you could pay an extra 10% on top of your hospital cover premium. If you wait until you are 40, you could face paying up to 20% more, if you wait until you are 45, you could face paying an additional 30% on top of your premium and if you wait until you are 50, you could pay an additional 40%, and so on up to a maximum loading of 70%.
Once you've paid the LHC for 10 consecutive years, your loading is removed, and you’ll pay as much as someone who took out the same policy in their 20’s. Only hospital cover (not extras only policies) will exempt you from paying LHC loading down the track.
No, the Government does not pay the private health insurance rebate on LHC loading component of a policy.
Private health insurance is optional in Australia. We have a Medicare system that will allow you to access treatment you need, however, you will generally go on a public waiting list. Depending on your income, taking out hospital cover could help reduce the risk of paying the Medicare Levy Surcharge, and the sooner you take out cover, the more you could avoid having to pay the Lifetime Health Cover LHC) Loading on your premiums if you decide to take out cover later in life.
Yes, you can. If you’ve just become a permanent Australian resident and are over 31, you’ll have one year from the date your register for your first interim (blue card) or full (green card) Medicare benefits to purchase hospital cover without incurring a loading. If you're under 31, the same rules will apply to that of Australian residents, which means you have until 1st July following your 31st birthday to purchase hospital cover without incurring the loading.
If you’ve recently turned 31 or are registered for full Medicare benefits, you may have received a letter from the Department of Health to inform you about the Lifetime Health Cover (LHC) loading which may affect your decision on whether you take out private health insurance.
If you decide not to take out private hospital cover before the 1st of July following your 31st birthday or you are receiving full Medicare benefits, you will generally face an annual 2% financial loading on your hospital cover should you decide to take out cover down the track. The older you are at the time of purchase, the higher the cost.
If you received the letter but already have hospital cover and the correct LHC loading has been applied, no further action is required. However, if you’re not sure whether your correct loading has been applied, it’s best to contact your health insurer for assistance.
If you don’t have hospital cover but would like to consider it, a great place to start is a health insurance comparison service like iSelect who can compare a range of policies from their range of providers and recommend a policy for your needs and budget*.
The Medicare levy is a tax levy that helps fund Medicare, Australia’s public health system. The Medicare levy is a 2% charge on most Australians taxable income, which is paid in addition to regular income tax.
Private health insurance premiums are not tax deductible, however, there are certain rebates and surcharges that are relevant to private health cover.
You can find out more about the private health insurance Australian Government Rebate and Medicare levy surcharge below.
There are generally two main ways that eligible Australians with health insurance can claim the private health insurance rebate. These include:
Generally speaking, the income tier which you select is only an estimation of your earnings for the full financial year, which can vary for a variety of reasons between July 01 and June 30.
The main implication to take into account is that any discrepancies between the rebate tier you select, and your taxable income for the financial year, can affect the size of your rebate. For example, if you earn more than your chosen tier, you likely won’t be eligible for as much of a rebate, and you may need to repay the difference through your tax return. On the other hand, if you earn less than your selected rebate tier, you could receive a higher rebate when you lodge your tax return at the end of the financial year.
If you’d like to claim the private health insurance rebate through your health fund premiums, then you only need to let your health fund know which income tier you expect to fall into for the financial year – you don’t need to provide your actual income.
If your income changes it simply means is that the ATO will adjust your PHI rebate based on the income information in your tax return, and rectify any discrepancies.
For example, if your income comes in lower than your chosen rebate percentage, you could receive a higher PHI rebate, and if your income comes in at higher, you could receive a lower rebate and pay the difference back at tax time
You can usually change your rebate tier online with your health fund if you’d prefer not to wait.
This ensures that a person entitled to an increased rebate, because someone on the policy is 65 or older, will continue to receive the increased rebate even if the older person leaves the policy, and provided that the policy is not replaced by a couple or family policy with another person (other than a dependent child).
This was introduced by the government to ensure that a change in family circumstances doesn’t lead to overpayment, and or a debt to the government, via the private health insurance rebate.
Source: https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd0405/05bd070#Passage
Almost all Australians with a taxable income pay the Medicare levy (with some exemptions). If you have private hospital cover, you’ll still be required to pay the Medicare levy. If you’re a higher income earner, suitable Private Hospital Cover may help reduce the risk of paying the Medicare Levy Surcharge (MLS).
The ATO assesses all Australians with health insurance for their eligibility to receive the private health insurance rebate. This is a rebate eligible Australians receive on their private health insurance premiums. The rebate is income tested, meaning the size of your rebate, and whether or not you’re eligible, can depend on your income.
Here are some quick links for more information on the ATO website:
Income thresholds and rates for the PHI rebate:
Understanding your eligibility for the PHI rebate:
https://www.ato.gov.au/Individuals/Medicare-and-private-health-insurance/Private-health-insurance-rebate/Private-health-insurance-rebate-eligibility/
The ATO Medicare levy calculator:
https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=MedicareLevy&anchor=MedicareLevy&anchor=MedicareLevy/questions&anchor=MedicareLevy/questions#MedicareLevy/questions
Anyone with private health insurance will automatically have their eligibility for the private health insurance rebate assessed by the ATO when you lodge a tax return. You can choose to have your rebate applied directly to your premiums by your health fund, or the ATO will factor this in when assessing your tax return. It’s worth noting that the private health insurance rebate is income tested, meaning that if you’re a higher income earner, your rebate could be reduced, or in some cases deliver no rebate.
Ambulance cover can cover some or all of the cost of emergency transport to and from hospital. Depending on the state you live in, cover can be purchased from your state’s ambulance authority, or from a health fund. Alternatively, you could purchase private health insurance policy that includes a level of ambulance.
It’s important to note that there can be some limitations or restrictions with the cover you purchase. Make sure you check all the coverage details before you purchase a policy.
If not freely available in your state, and depending on where you live, ambulance cover may be purchased directly from your state ambulance authority or a health fund, or you may find emergency ambulance included as part of a private health insurance policy.
Ambulance cover is treated differently in almost every state in Australia. Because of this, each state has their own criteria that establishes who is potentially exempt from some or all ambulance costs in their state. Common examples of exemption criteria include holding a Pensioner’s Concession Card or Health Care Card.
Medicare doesn’t cover ambulance, but if you have to pay for ambulance services outright, the amount you pay depends on the state you live in. For example, in Queensland, all emergency pre-hospital ambulance treatment and transport costs are covered by the State Government, and if you live in Tasmania, then all ambulance costs are also covered by the Government.
However, if you aren’t in the states above, you may find that you will need to foot the bill for an ambulance transportation, unless you have ambulance cover.
There may be additional exemptions from paying ambulance costs in your state, such as if you hold a Pensioner’s Concession Card or Health Care Card. For this reason, it’s important to check your state ambulance authority website to understand how coverage applies to you in your state.
When selecting a health insurance policy, it can be helpful to consider your immediate (and future) possible health requirements to determine a suitable level of cover for your needs. It may also be necessary to consider how many people will be covered within your policy (e.g. partners or dependents), and what budget requirements you have.
Once you're ready to find your policy, you can use iSelect to compare from our range of policies and providers, and select the one which suits you.
For example, if you were to purchase a policy without having had health insurance prior, you may serve waiting periods stated by the Private Health Insurance Act 2007. The maximum waiting periods are:
In 2023, Private Health Insurance premiums are set to rise by an average of 2.9%1.
This works out to an average increase of around $134 per year on a family policy, and an average increase of around $60 for people on a singles policy2.
But this year, funds are increasing their prices at different times of the year. With some funds increasing on 1 April, whilst others are deferring to later in the year, it’s important that you check with your fund to make sure you understand when and by how much they intend to increase their prices.
1 The Minister for Health and Aged Care Media Release – Annual private health insurance premium rise
2 Based on weekly calculations included in Minister for Health and Aged Care’ Media Release, multiplied by 52 weeks to reach an annualised figure
Each year, health funds make the case to the Federal Minister for Health to adjust the cost of their annual premiums based on the rising cost of providing health insurance.
These factors can include:
In 2023, premiums are set to rise by an average of 2.9%4.
3 Commonwealth Ombudsman – The reasons and processes behind premium increases, and your options if you’re considering changing your health insurance policy
4 The Minister for Health and Aged Care Media Release – Annual private health insurance premium rise
Although there is no exact timeframe, it is often quite a fast process.
If you’re wanting to change your health insurance provider and/or policy, it’s often a simple process. iSelect has a range of policies and providers to compare from in your search for a new policy*. , We can also help transfer you to the new policy, either over the phone with a team member, or online.
Our lives are continuously changing and as such it’s important to remember to review your health insurance policy. It may be worth doing an annual check to see if your policy needs an update to reflect your life changes more accurately. It’s important to consider the features you’re paying for that you no longer use (such as pregnancy cover if you no longer require it), as well as things which you’d like to add by upgrading cover. If you’d like some assistance in finding a policy that suits your lifestyle and budget, feel free to call iSelect on 1800 784 772.*
The cost of your family health insurance policy will vary depending on your provider, your level of cover, and your excess amount. For example, a combined hospital and extras cover will generally cost more than an extras-only policy. If you’re unsure which level of cover suits your family’s needs and budget, iSelect can help you compare a range of different policies and providers*
As of 1 April 2021, the Government increased the maximum age of dependents for private health insurance policies from 24 to 31 and also removed the age limit for dependents with disabilities1. This means, depending on your policy and provider, your dependents can stay on your family policy until aged 31 and any dependents with a disability can remain on your family policy for as long as they need.
However, it’s important to note that this change wasn’t mandatory for health funds to implement. This means that some funds may provide extended coverage for dependents, as well as extended cover for dependents with disabilities, but some funds may not. You can call iSelect on 1800 784 772 to understand which funds and policies we compare from can provide this level of cover.
1. https://www.health.gov.au/sites/default/files/documents/2020/10/budget-2020-21-private-health-insurance-increasing-the-age-of-dependants.pdf
Family health insurance is private hospital and/or extras insurance that helps cover the cost of medical expenses should you or your family need them. We are lucky enough in Australia to have access to the public health system, Medicare, which helps to cover part or sometimes the entire cost of medical services. However, unlike private cover, Medicare doesn’t cover all services and generally doesn’t allow you access to choose your own doctor and hospital, and benefit from shorter waiting periods should you require treatment.
Family health insurance can be a great way to help protect your family and can also give you access to benefits that might help you save money.
There are generally three types of family health insurance policies to choose from:
Unfortunately, there is no “best” policy. What constitutes a suitable policy will vary from family to family, and finding appropriate cover depends on your family circumstances, your needs, and your budget. If your family is made up of yourself and your partner, a couples health insurance policy may be suitable. A couple’s policy covers two adults, and those individuals don’t need to be married, just in a relationship. It can be taken out by married, de facto or registered couples.
Both you and your partner will receive cover for the same things at the same level of coverage. If, however, you and your partner have different medical needs, then you might want to consider two separate singles policies to suit your individual needs.
If your family is made up of yourself and your dependent, a single parent family policy may be suitable. This includes cover for one adult and dependent(s), including child/student/young adult dependents. Many health insurers offer policies designed for single parent families, which generally have lower-rate premiums compared with two-parent family cover2 However, the way a dependent is defined by your policy can vary between providers3. Generally speaking, a dependent is an unmarried person under the age of 18 years.
If you’re a single parent and are looking for single parent health insurance, it's important to ensure you understand the details of your policy and how the fund defines a dependent for the purposes of health cover.