Confused about private health insurance in Australia? From hospital cover to extras cover and beyond, this comprehensive guide will break down all you need to know!


  • Private health insurance covers some of the costs (and sometimes all of the costs) of a range of medical services, from in hospital treatment to physiotherapy, dental and more.
  • There are different types of cover, from hospital insurance to ancillary/general treatment) (extras cover).
  • How much you pay for private health depends on your chosen health fund and the health insurance premiums.
  • Medicare covers you for a range of health services, but not all, and you’ll often find yourself on long waiting lists to receive the care you need.

What is Private Health Insurance?

Private health insurance in Australia acts like an additional layer of choice and comfort on top of what the public healthcare system provides. While everyone has access to basic healthcare services through Medicare, private insurance with a dedicated health fund offers you the ability to choose your own doctor, get faster medical treatments, and even enjoy the benefits of a private hospital room.

Opting for private health insurance gives you more control over your healthcare decisions. You can select which specialists you want to see, and you’re not limited to the options provided by the public system. Essentially, it’s a way to personalise your healthcare experience.

This insurance doesn’t replace what Medicare offers; instead, it enhances it. You can still use all the public healthcare services, but you also get the added advantage of quicker access and more personal choices. In a way, it’s like upgrading from a basic service package to a premium one, offering you a broader range of healthcare options to choose from.

Types of Private Health Insurance

1. Hospital Cover

One of the main attractions of private healthcare is the hospital cover. This grants you access to private hospitals, cutting down those dreaded waiting times. Depending on your level of cover, it can also include a range of in-hospital treatments from elective surgeries to consultations.

Hospital cover falls under four main tiers:

Gold cover is the highest form of cover you can get, and you’ll be able to claim on a range of treatments – much more than basic cover. However, gold cover is also the most expensive cover, and you’ll often be paying towards $200 a month for peace of mind.

2. Extras Cover

Extras cover is another term you’ll hear often. This covers services that Medicare usually doesn’t pay for like physiotherapy, dental work, optical cover and sometimes even ambulance cover.

Does Private Health Insurance Cover the Total Cost of Treatment?

Though private health insurance offers a host of benefits, it’s important to note that it isn’t an all-expenses-paid trip. There are out-of-pocket costs that you may have to tackle depending on your level of cover and the medical treatments you receive.

These costs can range from consultation fees to medication that isn’t fully covered by your insurance. So, while your private health insurance gives you more options and quicker service, you’ll need to budget for those occasional extra costs that aren’t completely covered.

What About Waiting Periods?

CHI TIP: Waiting periods can be anywhere from 2 months for things like dental cover, to 24 months or longer for things like knee replacement surgery etc.

One thing to keep in mind with private health insurance policies is the waiting period that often comes attached. This is a set time where you have to wait before you can claim benefits for certain treatments or services.

These waiting periods serve a purpose: they help ensure that people aren’t just signing up to claim immediate high-cost services and then dropping out.

Whether you’re waiting for approval for a hospital procedure or certain ‘extras’ like dental or physiotherapy, remember that these periods are designed to keep the system fair and balanced for everyone.

Is Private Health Insurance Worth it?

Whether you take out private health insurance or not is a very personal decision based on your age, health and financial situation. However, there are a few circumstances where private health insurance is certainly worth it.

1. You Earn Over $93,000

For those with higher incomes who opt to go without private hospital cover, there’s an additional financial nudge called the Medicare Levy Surcharge. It’s a tax that aims to encourage these higher-income earners to take up private health insurance. This helps to reduce the burden on the public healthcare system, which is important for keeping wait times and resource allocation manageable for everyone. If you earn over $93,000, it makes much more financial sense to get private health insurance, even if you only use it once a year.

2. You’re About to Turn 31

If you want to avoid the Lifetime Health Cover (LHC) loading, it’s a good idea to sign up for private health before you turn 31. Simply put, if you sign up for private health insurance before you turn 31, you get to avoid a cost hike known as the LHC loading. This is a penalty of sorts that raises your insurance premiums by 2% every year if you decide to join after this age milestone. By diving into the private healthcare pool early, you keep your costs at a more manageable level for the long term.

3. You Have a Medical Condition You Need Cover For

If you have a specific medical condition, investing in private health insurance can be a smart move for faster access to specialists and more personalised care options. However, there’s a caveat: pre-existing conditions are usually subject to waiting periods. This means you might have to wait up to 12 months before your insurance covers the costs related to your condition. It’s a balancing act between enhanced healthcare options and potential waiting times.

4. You Want a Better Tax Return

The Australian Government isn’t just standing by; they actually incentivise taking out private health insurance through a Private Health Insurance Rebate. This rebate can lessen the financial weight of those monthly or yearly premiums. Basically, you can earn a tax rebate if you have a taxable income of under $140,000 (singles) or $280,000 (couples or families). The rebate is applied as a discount on your premiums or can be claimed at tax time. It’s the government’s way of giving you a little pat on the back for taking an active role in managing your healthcare options and reducing the strain on public resources.

How Private Health Insurance Works with Public Health Care

You might be thinking, “If we’ve already got public healthcare in Australia, what’s the point of private health insurance?” Great question! These two actually work hand in hand to give you more options and quicker access to health services. Let’s break it down.

In-Hospital Services

Public Health Care

If you stick with just public health care, your in-hospital services are usually covered. However, you won’t have the luxury of choosing your hospital, doctor, or specialist. It’s sort of a “you get what you get” deal.

Private Health Insurance

Opting for private health insurance changes the game. You get to pick your hospital and your medical team. Medicare will help cover some of the doctors’ costs, while your private insurance takes care of some or all of the hospital costs, such as your room and perhaps even your gourmet hospital dinner.

Doctor and Specialist Services Outside of Hospital

Public Health Care

Medicare has you sorted for essential services like GP visits, specialists’ consultations, and even some diagnostic tests and imaging. You’re in good hands, but maybe not the hands you would have chosen.

Private Health Insurance

Here’s the catch. Legally, health insurers can’t offer coverage for most of these out-of-hospital services. So, in this case, private health insurance doesn’t add much to the mix.

How to Choose the Right Policy

Health insurance policies vary widely. Before committing, check for exclusions, waiting periods, and how much the premiums will cost you. The Commonwealth Ombudsman and the Department of Health offer resources to help you make an informed decision.

Or, you can use CHI’s easy comparison tool to find the right health insurance policy for your needs!



What’s the difference between a private patient and a public patient?

As a private patient, you have the option to choose your own doctor and hospital. You’re also likely to have a private room if you’re hospitalised. On the other hand, a public patient is generally assigned a doctor and may share a room with others in a public hospital.

How do government rebates work?

The Australian government rebate is an incentive to encourage citizens to take out private health insurance. It reduces your premium costs, making the insurance more affordable. How much you get back depends on your age and income.

What Medicare benefits are available?

Medicare benefits typically cover visits to general practitioners and some specialists. It also includes tests and examinations that are necessary for your treatment. However, it doesn’t cover everything; private health insurance can fill in many of the gaps.

How do I handle out-of-pocket expenses?

Out-of-pocket expenses refer to medical costs that are not covered by Medicare or your private health insurance. Depending on your policy, you may still need to pay for things like prescription drugs or certain specialist services.

Are theatre fees covered by private health insurance?

Theatre fees are often included in ‘hospital cover’ when you’re a private patient, but it’s crucial to read the fine print in your policy to be sure. Public patients usually don’t have to worry about theatre fees, as these are generally covered by Medicare.