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Health insurance explained

Private Health Insurance Explained

If you've never had private health cover before, you might be a little confused with all the information and options out there. That's normal, and we're here to help. But first, let's look at the basics, and how it all works.

Why private health insurance?

In Australia, people can access public health services through Medicare. But, Medicare doesn't cover everything. Private health insurance provides a wider range of health care options for treatments both in and out of hospital.

Also, you could avoid paying the Medicare Levy Surcharge at tax time just by having private hospital cover for a full tax year.

Who needs private health insurance?

It doesn't matter if you're 22 or 92, if you're single, coupled up or raising a family. Everyone living in Australia should consider taking out private health insurance.

When should I get it?

Any time's the right time to take out health cover.
But you should seriously consider it if:

You're getting kicked off your parents' policy i

You're approaching your 31st birthday i

You just want peace
of mind i

Why go private?

Medicare provides affordable health care to everyone who needs it. But going public means you might have to wait for surgery or hospital treatments, and pay for other health services out of your own pocket.

This is where private health insurance comes in. It lets you skip the public waiting list, choose your own doctor, and helps cover the cost of services like dental, physio and optical.


Long wait

No choice of doctor

No choice of which hospital you're treated at

No financial help for out of hospital services

Private health insurance

No public waiting lists

Choose your doctor

Choose which hospital you're treated at

Get money back for services like dental, optical and chiro

You may get a government rebate

To take some pressure off the public health system, the government offers a handy rebate (partial refund) to people who want to take out private health insurance.

Depending on your age and income, you could get up to 35.722% off your health insurance premium. It’s designed to help make health insurance more affordable.

Rebates indicated are based on eligible customers with a single income, under 65 years old.

Medicare Levy Surcharge

The government charges a tax - the Medicare Levy Surcharge (MLS) to people who earn more than $90,000 ($180,000 for families) and don't have private hospital insurance. It’s designed to encourage people to buy private hospital insurance and seek treatment at a private hospital, therefore reducing the demand on the public hospital system.

If the MLS applies to you, or will apply to you, you need to take out an appropriate level of private hospital insurance to be eligible for exemption. If the MLS already applies to you and you take out an appropriate level of hospital insurance part way through the tax year, you’ll only pay the tax for the period of the year you didn’t have hospital insurance. By maintaining your hospital insurance, you won’t have to pay the MLS the following tax year.

For more information on how the MLS works, head to the Private Health Insurance Ombudsman

You avoid extra charges

If you don't have private hospital cover by 1 July following your 31st birthday, the premium you'll pay when you finally decide to take out cover will be higher. This is called Lifetime Health Cover Loading, and it adds up at a rate of 2% per year.

SAVE Taking out private hospital cover early means you don't have to pay the Lifetime Health Cover loading - this is an extra charge on top of your normal hospital premiums if you take out hospital cover after you turn 31.

So what does private health
insurance actually cover?

Private health insurance covers most medical services. These are broken down into two categories, hospital services, and services you receive out of hospital, like optical, dental or physio these are called extras.

Hospital cover

Covers things like:

  • Emergency
  • Removal of
    your appendix
  • Wisdom teeth
  • Joint

Cover out-of-pocket hospital costs with
Medical Gap Cover

When you see a doctor for a hospital treatment, it's up to them how much they charge you. If they want to charge more than the Medicare Benefits Schedule (MBS) fee, you'll have to pay an out-of-pocket Medical Gap.

To help cover this extra cost, our hospital products include Medical Gap cover. If your doctor participates in our gap cover program, you could either reduce or eliminate your Medical Gap for all your in-patient treatments.

Check with your doctor first!

If your specialist doesn't participate in our Access Gap Cover scheme, you could have to pay more for your treatment so it's a good idea to check with them first.
For more information and a list of services covered by Medicare, visit MBS Online.

Extras cover

Covers things like:

  • Dental
  • Optical
  • Physio
  • Pharmaceuticals

Get money back on Extras services

Get cover for part of the cost of all the Extras services included in your policy. How much you get back depends on what level of cover you have.

So, how do I know which policy is right for me?

Well, it all depends on what you want to be covered for.

If you want to avoid the Medicare Levy Surcharge, a basic hospital policy will do it. But if you're planning on starting a family, you'll need cover for maternity as well. It all comes down to what you need.

Whatever you're after,
we can help you find a policy that's right for you.