Why Get Insured?
While all Australians and permanent residents have access to Medicare and the public health system, private health insurance gives you more choices about your treatment, and it can help pay for things that the public system doesn’t cover.
Private health insurance provides choices
A privately insured patient can decide to be treated in a public or a private hospital, can choose their own doctor and is often provided with flexibility with the timing of their procedure or treatment.
Private health insurance provides cover
Private health insurance can also provide cover for out-of-hospital treatments not usually covered by Medicare, like ambulances, dental treatment and orthodontics, glasses and contacts, and physiotherapy.
Important things to know
While private health insurance provides important choices about treatment, in some cases, you will need to share the costs with your insurer.
- A ‘gap’ is the amount you pay either for medical or hospital charges, over and above what you get back from Medicare or your private health insurer. Some health funds have gap cover arrangements to insure against some or all of these additional payments.
- Restrictions and exclusions. Some health insurance policies give you full cover for the costs of most hospital admissions, apart from any excess or co-payment you agree to pay. Other policies restrict or exclude benefits for some treatments, in return for a lower premium.
- Excess or co-payment. An excess is an amount of money you agree to pay for a hospital stay, before health insurer benefits are payable. With a co-payment, you agree to pay a set amount each day you are in hospital.
There are also a number of Government incentives to encourage people to take out and stay covered by private health insurance.
- Lifetime Health Cover is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover. If you do not have hospital cover with an Australian registered health fund on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30.
- Private Health Insurance Rebate. Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested. Click here to see the income tiers.
- The Medicare Levy Surcharge (MLS) is levied on payers of Australian tax who do not have private hospital cover and who earn above a certain income. The surcharge aims to encourage individuals to take out private hospital cover, and where possible, to use the private system to reduce the demand on the public Medicare system.