​How Private Health Insurance Works

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​​In Australia, private health insurance is 'community rated'.
​This means that everyone is entitled to buy the same product, at the same price (except for Lifetime Health Cover and Age-based Discounts), and is guaranteed the right to renew their policy. A health insurer cannot refuse to insure you or refuse to sell you any policy you want to buy.

Some of the things to consider when looking into private health insurance include:
  • What is covered? In Australia, the public health system, Medicare, covers most Australian residents for health care. However, Medicare does not cover everything and you can choose to take out private health insurance to give yourself a wider range of health care options and more comprehensive cover.
  • How does it work? There are two types of health insurance: hospital and general treatment (ancillary or extras) cover. You can buy policies for these types of cover separately or most insurers offer combined policies. There will be limitations on what and when you can claim with any policy you buy.
  • What government incentives and surcharges affect my insurance? The Private Health Insurance Rebate, the Lifetime Health Cover rules, and Age-based discount affect how much you pay for private health insurance. The Medicare Levy Surcharge affects people earning above a certain threshold who don't hold private hospital cover. 
  • Overseas visitors & students If you are in Australia on a temporary visa, you should consider taking out some form of visitor's health cover for the duration of your stay. On some visas, you may be required to take out a form of visitor's health insurance.

Overview of Health System

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Medicare is a universal health care system that delivers affordable, accessible and high-quality health care for most Australian residents. You can also choose to take out private health insurance to give you more health care options and to cover items which are not covered by Medicare.

You can get a Medicare card if you live in Australia or Norfolk Island and meet certain criteria. 

You may be eligible for a Medicare card if you visit from certain countries. You should note that some limits may apply. If you are visiting from overseas and are a reciprocal Medicare card holder, see Overseas visitors & overseas students health cover.

A summary of what is covered by private health insurance and Medicare for hospital, medical services and general treatment, pharmaceutical benefits and ambulance can be found here.

Private Health Insurance Basics

There are generally three types of private health insurance - hospital policies cover you when you go to hospital, while general treatment policies (sometimes known as ancillary or extras) cover you for ancillary treatment (e.g. dental, physiotherapy), and ambulance policies cover you for ambulance transport. 
Most health insurers offer combined policies that provide a packaged cover for both hospital and general treatment services, or you can buy separate hospital and general treatment policies to 'mix and match'.

What should I consider when purchasing health insurance?

  • Waiting periods: If you are purchasing cover for the first time or upgrading your plan, you need to serve a waiting period before you can claim your benefits. During the waiting period, you do not receive any benefits for certain treatments or you receive lower benefits for a period of time.
  • What isn't covered on my policy: You should take note of what is and isn't covered on your policy - not all policies are comprehensive. Depending on your level of cover, you may not be fully covered against all costs associated with your treatment and will have to pay some out-of-pocket expenses.
  • Your healthcare needs: You should review your cover from time to time to ensure it still meets your needs. If the premium has become a concern for you, there are a number of ways you may be able to manage your policy and lower costs. If you already have private health insurance, you can also consider moving to a different insurer.
  • Comparing health insurance policies: every policy available for sale in Australia is summarised on this website in the form of a Private Health Information Statement (PHIS) to make it easier to compare policies. For private hospital cover, standard Clinical categories specify what is and is not covered on each policy.

Government Surcharges & Incentives

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The Australian Government provides the Private Health Insurance Rebate to encourage people to take out and maintain private health insurance. Most people are eligible for a rebate on their insurance costs.

The Age-based Discount reduces the cost of starting private health insurance for people aged between 18 and 29.

If you purchase hospital cover after the 1 July following your 31st birthday, you will have to pay the Lifetime Health Cover (LHC) loading on top of your premium. The loading increases for every year you are aged over 30.

You can check to see if you need to pay the LHC loading and how much it may be by using the Lifetime Health Cover calculator.
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If you are not covered by a private hospital insurance policy and you earn above a certain income threshold, you may have to pay the Medicare Levy Surcharge when you lodge your tax return.

Health Insurers

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A list of registered health insurers can be found here. 

Policies are sometimes sold using secondary brand names or by another company. If your insurer isn’t on this list, try entering a name in the search box to locate the registered insurer.

Otherwise, click on the name of an insurer in the list for more details, including their performance, policies and contact details.

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