Get more control over your healthcare

With private hospital cover, you can choose to get treated at a public or private hospital – and you get to choose your doctor. Needless to say, this can do a lot for your peace of mind. If you ever need treatment, it can be reassuring to know you have some control over your care and your choice of facility. Plus, in a private hospital, you can request a private room (if one’s available).

Have a shorter wait for elective surgery

The median wait for private patients having elective surgery in public hospitals was only 28 days in the 2024–25 financial year, compared to 53 days for public patients, according to the Australian Institute of Health and Welfare. Many necessary surgeries, like joint replacements, are elective procedures (this means they’re medically necessary but not an emergency), so waiting times can be long. A shorter wait in the private system versus in the public system can mean less of an impact on your day-to-day life and a swifter recovery.

Get money back on services Medicare doesn’t cover

Extras private health insurance can help pay for services Medicare doesn’t cover, like dental check-ups, physiotherapy appointments and prescription glasses. Having extras cover was the second most common reason people had private health insurance (after peace of mind) in 2025, according to Ipsos.¹Ipsos Health Care and Insurance Australia 2025 study conducted between July and September 2025. The sample is n=1,607 Australians 18+ years with private health insurance. How much you get back and what services are covered depends on your level of cover.

Pay less in tax if you’re a high-income earner

To avoid the Medicare Levy Surcharge (MLS) in 2026–27 financial year, you need to either have a single income of less than $105,000 or a combined income of less than $210,000 – or you can take out a hospital policy. If you take out a hospital policy, you’ll avoid the MLS plus have cover as a private hospital patient. Otherwise, if you earn above the MLS income threshold, you may have to pay an additional 1.5% of your taxable income as tax.

Premium costs

One drawback to health insurance is that you’ll need to pay a regular premium to start and keep your cover. Typically, the higher your level of cover, the higher the premium is. It’s why it’s important to consider what your needs are from health cover, compare what’s available and pick an option that gives you value for money. For instance, while gold hospital cover is packed with cover, you might be happy with bronze or silver instead.

Your premium can also be increased if you have Lifetime Health Cover (LHC) loading – LHC loading often applies if you didn’t have hospital cover after you turned 31. It’s a government initiative to encourage young people to take out hospital cover.

However, your premium can also come down, thanks to the private health insurance rebate. Depending on your age and income, you can get up to 32.158% back on your health insurance (for 1 July 2026 to 31 March 2027), either as a discount when you pay for your policy or a government rebate on your tax return. Similarly, if you’re under 30 and take out hospital cover, you can receive an age-based discount of up to 10% (and hold it until you turn 40!).

Out-of-pocket expenses

Out-of-pocket costs are ones you’ll need to pay when your health insurance doesn’t cover the full cost of a service or treatment; this is a drawback to health insurance. This includes excesses and co-payments for hospital cover. For instance, excesses can be as much as $750 per person (however, a higher excess can mean a lower premium).

On average, 89% of hospital-related charges and 50.7% of extras charges were covered by patients’ health insurance in Australia in 2024–25 financial year, according to the Commonwealth Ombudsman. The remaining charges were the ‘gap’ the patients had to pay themselves.

While you might not always have the full bill covered, your insurer might at least give you a heads up about what to expect to pay (called a ‘known gap’). In fact, 97.1% of hospital services either had no gap or a known gap in in 2024–25 financial year, according to the Commonwealth Ombudsman.

Waiting periods

Health insurance waiting periods restrict when you can start claiming on your policy and are a drawback to health insurance. So, while you might technically have a policy that covers the treatment, you’re not eligible to claim for it just yet. But waiting periods don’t last forever! And, even better, you can bring across served waiting periods when you move to a new policy or fund, assuming you haven’t had a break in cover (you’ll still need to serve any waiting periods for cover that’s new to you).

The Australian Government has made it so that hospital cover waiting periods are typically only 2 months at most. The exceptions to the rule are pre-existing conditions and pregnancy and obstetrics. These come with a maximum waiting period of 12 months.

Health funds don’t have limits for how long waiting periods on their extras cover are. However, the competitive nature of the market means that you’ll usually see the same length of waiting period across policies and insurers for services. For instance, major dental tends to come with a 12-month waiting period, while general dental can have no waiting periods or just a 2-month one.

Exclusions and limitations

One problem with extras health insurance policies is they don’t cover every kind of medical or service or treatment, while some are only covered up to a certain limit, like $500 or 10 sessions each year. If a policy excludes or has a low limit for a service you really want covered, it’s probably not going to be a great fit for you.

Keep in mind though that some kinds of services also just aren’t plain covered on health insurance. For instance, natural therapies like naturopathy, yoga and homeopathy often aren’t be covered by health insurance. Likewise, plastic surgery for purely cosmetic reasons won’t be covered, however this doesn’t exclude medically necessary reconstructive surgery that comes with cosmetic benefits.

Extras cover is where limits are most commonly found. Typically, limits reset annually. So, if you hit your limit, you’ll be the one responsible for covering 100% of the bill until it resets.