When it comes to private health insurance cover in Australia, there are three main options to choose from:

While private health insurance is designed to provide a higher level of health services beyond what Medicare offers, it’s important to weigh up the benefits of the different levels of cover to find the right type of private health for you.

In this blog, we’ll uncover what you need to know about hospital treatments when you take out hospital insurance, as well as what you can expect when you take out just extras services.

By the end of this article, you’ll have a good idea of the different hospital policies and extras policies available in Australia so you can find the right level of private health cover for your needs.

What is Hospital Cover?

Hospital cover covers some of the costs associated with treatment as a private patient in a private or public hospital.

These can include:

  • Hospital accommodation
  • Medical services
  • Theatre fees, and more.

With hospital cover, you can bypass the waiting lists associated with public hospitals, opt for a private room, and often choose your preferred specialist.

However, it’s important to note that your level of cover and any exclusions or pre-existing conditions in your health insurance policy may affect your out-of-pocket expenses.

What is Extras Cover?

Extras cover, or general treatment cover, caters to out-of-hospital services not typically covered by Medicare.

This includes:

Extras policies also often include ambulance cover, although coverage for emergency ambulance services varies between providers.

Extras cover helps reduce out-of-pocket costs for these services, but keep in mind annual limits and possible waiting periods.

Medicare Vs Private Health Insurance

While Medicare, the Australian government’s universal healthcare scheme, provides a solid foundation, private health insurance supplements this with a broader range of services and benefits.

For instance, with hospital cover, you have the option of being treated as a private patient in a private hospital, whereas Medicare only covers treatment as a public patient in a public hospital.

Additional Benefits of Hospital Cover

Taking out private health insurance doesn’t just benefit your health, it can also help reduce the tax you pay.

Medicare Levy Surcharge

In Australia, the Medicare Levy Surcharge is an additional tax imposed on individuals and families who earn above a certain income threshold and do not have an appropriate level of private hospital cover. The surcharge aims to reduce the burden on the public healthcare system by encouraging those who can afford it to take up private health insurance.

The Medicare Levy Surcharge is calculated based on your income and can range from 1% to 1.5% of your taxable income. The exact percentage depends on your income level and whether you are a single individual or part of a family.

It’s important to note that the surcharge and rebate only applies to hospital cover, not extras cover.

Australian Government Rebate

The Australian Government health insurance rebate is another significant aspect of private health insurance in Australia.

Each year, private health funds receive a rebate adjustment factor from the Australian Government, which is then applied to the premium of each customer.

The rebate is a financial incentive for individuals to obtain private health insurance by offering a discount on their premiums. By making private cover more affordable, the rebate aims to ensure that a greater number of Australians have access to comprehensive health insurance options that are better suited to their individual needs.

Deciding Between Hospital Cover, Extras Cover, or Both

When deciding between hospital cover, extras cover, or both, there are several factors to consider. Here are some instances where one, the other, or both types of coverage might be a smart choice:

Hospital Cover:

  • If you are concerned about potential high costs associated with hospital admissions, surgeries, or specialist treatments, having hospital cover can provide financial security. It helps cover the expenses related to in-hospital medical procedures, accommodation, and medications.
  • If you prefer to have more control over your choice of doctor or specialist and want to access private hospitals or a specific network of healthcare providers, hospital cover can be beneficial. It allows you to choose your preferred healthcare professionals and hospitals.
  • If you have a pre-existing condition that may require hospitalisation or ongoing treatment, having hospital cover can ensure that you receive timely and comprehensive care without relying solely on the public healthcare system.
  • If you’re about to turn 31, taking out hospital cover will exempt you from the Lifetime Health Cover Loading (LHC)fee.

Extras Cover:

  • If you frequently utilise services such as dental check-ups, optical services, physiotherapy, chiropractic treatments, or alternative therapies, extras cover can help offset the costs. It provides benefits for a wide range of ancillary healthcare services not covered by Medicare.
  • If you value preventive care and regular check-ups, extras cover can incentivise you to maintain good oral and optical health, as well as access other preventive services like remedial massage or gym memberships, depending on the policy.
  • If you have dependents, such as children or elderly family members, who may require services like orthodontics, prescription glasses, or hearing aids, extras cover can help manage the costs of their specific healthcare needs.

Combined Cover:

  • If you want comprehensive coverage that includes both hospital and extras services, a combined policy can offer convenience and peace of mind. It simplifies the management of your health insurance by bundling both types of coverage into a single policy.
  • If you anticipate the need for both hospital care and ancillary services, such as needing surgery followed by post-operative physiotherapy, a combined policy can provide continuity of care without the hassle of managing separate policies.
  • If you are eligible for the Australian Government health insurance rebate, having a combined policy may maximise your rebate entitlement, as it applies to both hospital and extras components of the coverage.

Ultimately, the decision to choose hospital cover, extras cover, or both depends on your specific circumstances. It’s wise to carefully assess your health needs, consider your budget, and compare the different policies available from various insurers.


What does a higher level of cover mean in hospital or extras policies?

A higher level of cover typically means a wider range of services are included, fewer exclusions, higher annual limits, and possibly shorter waiting periods. However, a higher level of cover also usually comes with higher premiums.

Can I switch providers if I’m not happy with my current hospital cover or extras cover?

Yes, you can switch health funds or providers. However, keep in mind that waiting periods might apply when you switch, especially for benefits not included in your old policy.

Are all health services covered in private health insurance policies?

Not all health services are covered in private health insurance policies. The coverage depends on the level of cover chosen, the inclusions in your policy, and any exclusions or restrictions.

What are clinical categories in health insurance?

Clinical categories refer to the different areas of healthcare services covered under extras cover. These categories typically include services such as dental, optical, physiotherapy, chiropractic treatments, psychology, and more. Each category may have its own annual limits and benefit percentages.

Does hospital cover include coverage for reconstructive surgeries?

Yes, hospital cover often includes coverage for reconstructive surgeries that are medically necessary, such as after an accident or for certain medical conditions. However, the specific coverage and eligibility criteria may vary between policies and insurers.

What is Silver Plus and Basic Plus in health insurance?

Each insurance provider will have different names for different levels of cover, but basically it’s split into four levels: basic, silver, bronze and gold hospital cover, with each tier offering different levels of cover.

Does hospital insurance cover palliative care?

Yes, health insurance policies often cover palliative care. However, the extent of coverage for palliative care may vary between policies and insurers, so it’s important to review the specific details of the policy.

Need Help Finding the Right Health Insurance Policy for Your Needs?

If you’re looking for the right hospital or extras policy cover but feeling overwhelmed by the multitude of choices, we can help.

Our free online tool is designed to assist you in finding the perfect health insurance policy for your specific needs.

In just a few minutes, you can receive personalised quotes from Australia’s leading health fund providers.

Take the stress out of your search and let us help you find the ideal policy that meets your needs.