Is private health insurance worth it? The answer is a personal one. From your taxable income to your age, private hospital cover isn’t for everyone. But when you consider 44.9% of Australians (12.1 million people) have private hospital cover and 54.6% of Australians (14.7 million people) have private extras cover, maybe it is worth it after all.


✅ From reducing your healthcare costs to shorter waiting times when you need healthcare services, there are plenty of pros to health insurance.

✅ Depending on your age and income bracket, it might be worth having private health insurance (even if you don’t use it much).

✅ Peace of mind does come with a monthly cost, however, so be sure to consider your own financial situation before deciding if private health is right for you.

Are you one of the 14.7 million Australians with health insurance? Or are you on the fence and wondering if it’s right for you? Perhaps you have private health but are considering cancelling your policy as you start to feel the pinch of the rising cost of living.

One of the biggest health decisions you’ll make is whether to opt for private health insurance or rely solely on the public healthcare system. To make your decision a bit easier, we’re breaking down the advantages and disadvantages of having private health insurance.

The Advantages of Private Health Insurance

Reduced Waiting Times for Elective Surgery

One of the standout benefits of private health insurance is reduced waiting times, particularly for elective surgery. Public hospitals do a great job but can sometimes have longer waiting lists. In fact, figures from the Australian Institute of Health and Welfare (AIHW) showed in 2021-2022, 50% of patients waited at least 40 days for admission from elective surgery waiting lists. Going private could mean getting your procedure done sooner.

Choice of Medical Treatment and Providers

Private health insurance often allows you to have more control over your hospital care – from choosing where you have your medical treatment to your choice of healthcare providers. This gives you more power over who you’d like to see and where you’d like to be treated, offering a more personalised healthcare experience than you’d receive as a public patient.

Private Hospital Amenities

Like the idea of staying in a private room for the duration of your hospital treatment and medical services? It might not be a five-star hotel, but having a private room can make a hospital stay more comfortable. Private health insurance cover often includes amenities for private patients, like private rooms in a private hospital setting.

Extras Cover for Ancillary Services

With private health insurance, you can also opt for extras cover. This means you can claim benefits for services like ambulance cover, physiotherapy, podiatry, and dental check-ups, which are generally not covered by the Australian government’s Medicare system.

Tax Benefits

For high earners, taking out a private health insurance policy could save you from paying the Medicare Levy Surcharge. Additionally, some people may qualify for a private health insurance rebate, which is an amount the government contributes to your premium, making insurance a bit more affordable.

Lifetime Health Cover Loading

Lifetime Health Cover Loading is a feature in Australia’s healthcare system that gently nudges you to get private health insurance before turning 31. If you jump in after that age, you’ll see a 2% loading fee tacked onto your premium for each year you waited. It’s a balance between encouraging early participation without breaking the bank if you join later. Consider it a nudge, rather than a shove, towards making a proactive health decision.

The Disadvantages of Private Health Insurance

Out-of-Pocket Costs and Copays

While you gain a lot of perks, having private health insurance doesn’t mean you’ll escape all medical costs. Out-of-pocket expenses like copays can still apply, and these can add up.

Exclusions and Waiting Periods

Beware of the fine print. Many private health insurance policies have exclusions for certain types of medical treatment. And don’t forget about waiting periods; some treatments may not be available immediately after you take out a policy. For most health services, you’ll be waiting anywhere from 3 months to 12 months before you can begin claiming from your insurance provider.

Complexity and Variety of Plans

Private health insurance in Australia comes in all shapes and sizes, offered by various health funds and insurance companies. The sheer variety of health insurance plans can make choosing the right one confusing.

Increase in Health Insurance Premiums

Over time, you’ll likely see an increase in your health insurance premiums. While the Australian government does offer some rebates, these often don’t keep pace with the annual hikes in premiums.

EXAMPLE: Knee Replacement Surgery With & Without Insurance Costs

Let’s take the example of a knee replacement surgery with private healthcare, and without private healthcare.

  • Without private health insurance: Going through the public system you could potentially walk away with little to no out-of-pocket expenses. However, the waiting times can be agonisingly long. Data from the Australian Health and Welfare Institute for 2021/22 shows that nearly 13% of public patients waited more than a year for orthopaedic surgery. Plus, you don’t get to pick your specialist.
  • With private health insurance: If you’ve got private health insurance, you can sidestep the waiting game and even choose your own specialist. Depending on your plan, hospital, and doctor, you could be looking at a variety of out-of-pocket costs. Based on the Medicare Benefits Schedule (MBS), these could range from around $192 to over $500, after Medicare’s 75% rebate.

Now, if you’re thinking of going fully self-funded at a private hospital, brace yourself for a hefty bill. Estimates put the average cost at around $25,000 to $27,000. Sure, Medicare may cover some specialist fees, but they certainly won’t pitch in for a private hospital room or theatre fees.

Let CHI Help You Find the Health Insurance Policy for Your Needs

So, we’ve walked you through the ups and downs of private health insurance in Australia. From getting your surgery done quicker to enjoying a private hospital room, there are plenty of perks. But, it’s essential to weigh these advantages against your own healthcare needs and budget.

So, what’s the next step?

Compare policies today to see how private health insurance could fit into your life. With CHI’s easy online comparison tool, you can quickly sift through various plans, picking the one that ticks all your boxes.