Health insurance explained
This website aims to answer your questions about private health insurance by explaining how it works, and who and what is covered. You can also compare policies from different Health Funds to help you to choose a private health insurance policy that is right for you.
There are many things to consider when looking into private health insurance:
Who is covered?
There are six categories of membership that provide cover for individuals and different family groupings:
Number of people covered Usually listed as
1 adult Single
2 adults Couple
2 adults and dependents(s) - includes child/student dependents Family
1 adult and dependents(s) - includes child/student dependents Single parent family
1 adult and any dependents(s) - includes child/student/young adult dependents Single parent extension
2 adults and any dependents(s) - includes child/student/young adult dependents Family extension
dependents only (no adults) Children only
Some funds may require people to be related by birth or in a relationship to be covered under the same policy.
A dependents is an unmarried person under the age of 18 years.
A health fund may choose to consider a person between the ages of 18 and 24 years as a dependents, but will usually require certain conditions to be met for their cover to continue without a change in premiums - for example, the person may have to be a full-time student.
If the person does not qualify as a child or a student, then the fund may still choose to continue their cover as a young adult dependents, in exchange for a higher premium.
These conditions vary between health funds, so check with your fund to see which rules apply to you. See the List of Funds for a list of all the registered health funds in Australia and their contact details.
Health funds may offer cover for some or all categories of membership in one or more states - they do not have to offer cover for all categories. See How health funds work for further information.
What is covered?
In Australia, Medicare provides universal health insurance that delivers affordable, accessible and high-quality health care for citizens and permanent residents. However you can also choose to take out private health insurance to give you more health care options and to cover items which aren't covered on Medicare.
Below is a side by side summary of what is covered by private health insurance and what Medicare covers for hospital, medical services and general treatment, pharmaceutical benefits and ambulance.
Since 2007 funds have also been able to cover a variety of alternatives to hospital treatment, known as Broader Health Cover.
Hospital
Private Cover Medicare
You can choose to be treated as a private patient in either a public OR a private hospital.
You can choose your own doctor, and decide whether you will go to a public or a private hospital that your doctor attends. You may also have more choice as to when you are admitted to hospital.
If you choose to be treated as a private patient in a hospital (public or private), Medicare will cover you for 75% of the Medicare Benefits Schedule (MBS) fee for associated medical costs.
You can be treated as a public patient in a public hospital by a doctor appointed by the hospital.
You cannot choose your own doctor and you may not have a choice about when you are admitted to hospital.
You can choose to be treated as a public patient even if you are privately insured.
The remaining hospital and medical costs will be charged to you - some or all of these costs may be covered on your private health insurance, depending on your policy.
The remaining costs include 25% of the MBS fee for doctors' services and any amount the doctors charge above the MBS fee, plus some or all the costs of:
hospital accommodation,
theatre fees,
intensive care,
drugs, dressings and other consumables,
prostheses (surgically implanted),
diagnostic tests,
pharmaceuticals, and
any additional doctor's fees.
As a public patient you will be treated at no charge.
Medicare does not cover:
private patient hospital costs (for example, theatre fees or accommodation),
medical and hospital costs incurred overseas,
medical services which are not clinically necessary, or surgery solely for cosmetic reasons.
For further information please see:
What is covered by Medicare?
What is covered by private health insurance?
Medical Services and General Treatment
Private Cover Medicare
If you visit a doctor outside a hospital, Medicare will reimburse 100% of the MBS fee for a general practitioner and 85% of the MBS fee for a specialist - this applies whether or not you hold private health insurance. If your doctor bills Medicare directly (bulk billing), you will not have to pay anything.
Medicare does not provide benefits for the following:
most dental examinations and treatment,
most physiotherapy, occupational therapy, speech therapy, eye therapy, chiropractic services, podiatry or psychology services,
acupuncture (unless part of a doctor's consultation),
glasses and contact lenses,
hearing aids and other appliances
home nursing.
You can arrange private health insurance to cover many of these services.
Medicare provides benefits for:
consultation fees for doctors, including specialists,
tests and examinations by doctors needed to treat illnesses, such as x-rays and pathology tests,
eye tests performed by optometrists,
most surgical and other therapeutic procedures performed by doctors,
some surgical procedures performed by approved dentists,
specific items under the Cleft Lip and Palate Scheme,
specific items under the Enhanced Primary Care (EPC) program
For further information please see:
What is covered by Medicare?
What is covered by private health insurance?
Pharmaceutical
Private Cover Medicare
Under the Pharmaceutical Benefits Scheme (PBS), you pay only part of the cost of most prescription medicines purchased at pharmacies - this applies whether or not you hold private health insurance. The rest of the cost is covered by the PBS. You must present your Medicare card to obtain this benefit.
The amount you pay varies with the medicine, up to a standard maximum. People with concession cards have a lower maximum payment.
You can arrange private health insurance to cover many prescription medicines which aren't listed on the PBS. Most funds will require you to make a co-payment towards the cost and will have limits on how much you can claim. Some prescription medicines are not listed on the PBS. You pay the full amount for these non-PBS items.
Ambulance
Private Cover Medicare
In Queensland and Tasmania, emergency ambulance services are provided free by the State Government. New South Wales and Australian Capital Territory provide free ambulance cover for pensioners and low income earners.
If you do not fall into any category above you can arrange ambulance cover from the ambulance authority in your state or with a health fund. Medicare does not cover the cost of emergency or other ambulance services.
How does it work?
There are two types of private health insurance - hospital policies cover you when you go to hospital, while general treatment policies (sometimes known as ancillary or extras) cover you for ancillary treatment (e.g dental, physiotherapy). Most health funds offer combined policies that provide a packaged cover for both hospital and general treatment services, or you can buy separate hospital and general treatment policies to 'mix and match'.
If you're purchasing cover for the first time or upgrading your plan, you need to serve a waiting period before you can claim your benefits. During the waiting period, you don't receive any benefits for certain treatments or you receive lower benefits for a period of time.
You should also take note of what is and isn't covered on your policy - not all policies are comprehensive. Depending on your level of cover, you may not be fully covered against all costs associated with your treatment and have to pay some out-of-pocket expenses.
You should review your cover from time to time to ensure it still meets your healthcare needs. If the premium has become a concern for you, there are a number of ways you may be able to manage your policy and lower costs. If you already have private health insurance, you can also consider moving to a different fund.
Hospital cover
Hospital policies help cover the cost of in-hospital treatment by your doctor and hospital costs such as accommodation and theatre fees. Generally, any medical services listed under the Medicare Benefits Schedule (MBS) can be covered on some form of private hospital insurance. Some services which are not listed on the MBS, such as elective cosmetic surgery or laser eye surgery, are only covered by private hospital insurance to a limited extent or not at all.
Hospital policies fall into four general categories. The classifications are based on the services that are shown as covered, excluded or restricted on standard information statements.
Top Private Hospital Cover - must cover all services where Medicare pays a benefit;
Medium Private Hospital Cover - excludes or restricts one or more of the following but includes any services in the basic classification: Pregnancy and birth related services, Assisted reproductive services, Cataract and eye lens procedures, Joint replacements i.e. shoulder, knee, hip and elbow including revisions, Hip and knee replacements, Hip replacements, Dialysis for chronic renal failure and Sterilisation.
Basic Private Hospital Cover - excludes or restricts one or more of the following: Cardiac and cardiac related services, Non-cosmetic plastic surgery, Rehabilitation, Psychiatric services, Palliative care;
Public Hospital Cover - covers default benefits for treatment in public hospital only.
The classifications do not take into account Hospital treatment for which Medicare pays no benefit (e.g. most cosmetic surgery or other services with are not listed on standard information statements); and do not take into account whether a policy includes an Excess and/or Copayment or benefit limitation period.
For explanations of the medical terms used in the Standard Information Statements, you can refer to the Glossary. For advice on policy exclusions and restrictions, you can refer to the Ombudsman's Factsheet on Exclusions and Restrictions.
Funds generally offer several different policies across these categories, combined with different levels of excess or co-payments.
An excess is amount that you agree to pay towards the cost of hospital treatment, in exchange for lower premiums. You may be required to pay an excess every time you go to hospital, or only the first time, depending on the private health insurance policy you take out. A co-payment is where you agree to pay a set amount for each day you are in hospital, in exchange for lower premiums - for example, you agree to pay the first $50 per day in hospital.
General Treatment cover
General treatment policies (also known as ancillary or extras cover) provide benefits for ancillary services - for example, physiotherapy, dental and optical treatment.
General treatment policies may be offered separately or combined with hospital cover. There are three general categories of policies. The classifications are based on the services that are shown as covered on standard information statements.
Comprehensive Cover - must include cover for General dental, Major dental (benefit limit must be average or above average for the industry), Endodontic, Orthodontic (benefit limit must be average or above average for the industry), Optical, Non-PBS Pharmaceuticals, Physiotherapy, Podiatry, Psychology;
Medium Cover - must include cover for General dental, Major dental, Endodontic AND any five of the following: Orthodontic, Optical, Non-PBS Pharmaceuticals, Physiotherapy, Chiropractic, Podiatry, Psychology, Hearing aids;
Basic Cover - all other policies.
For explanations of the medical terms used in the Standard Information Statements, you can refer to the Glossary
Combined cover
Many health funds offer packaged policies that provide cover for both hospital and general treatment services. Some funds have pre-packaged policies, while others allow you to mix and match hospital and general treatment options. For example, you may be able to select a basic hospital cover and a comprehensive general treatment policy to create your own combined package.
What government incentives and surcharges affect my insurance?
The Australian Government provides the Private Health Insurance Rebate to encourage people to take out and maintain private health insurance. Most people are eligible for a 30% rebate on their insurance costs.
If you purchase hospital cover after the 1st of July following your 31st birthday, you will have to pay the Lifetime Health Cover (LHC) loading on top of your premium. The loading increases for every year you are aged over 30.
You can check to see if you need to pay the LHC loading and how much it may be by using the Lifetime Health Cover calculator.
If you are not covered by a private hospital insurance policy and you earn above a certain income threshold, you may have to pay the Medicare Levy Surcharge when you lodge your tax return.
Overseas visitors and students
If you are visiting Australia and hold a temporary visa you should consider taking out Overseas Visitors Health Cover (OVHC). If you need to visit a doctor or stay in hospital while you are here you could find yourself responsible for the full cost of treatment, which can be very expensive.
In some cases you may be required to take health insurance as part of your visa conditions. If you are applying for a Visa Subclass 457 or Visa Subclass 485, you are required to have a minimum level of health insurance and to maintain it for the duration of your stay in Australia. Students in Australia who hold a temporary student visa may be required, as a visa condition, to take out Overseas Student Health Cover (OSHC).
Visitors (but not students - see OSHC) from United Kingdom, the Republic of Ireland, New Zealand, Sweden, the Netherlands, Finland, Belgium, Norway, Slovenia, Malta and Italy may apply for Medicare benefits under Reciprocal Health Care Agreements with Australia. They may be able to receive immediate necessary medical treatment in the public health system, but aren't otherwise entitled to benefits and should still consider taking out OVHC.
If you are a recent migrant to Australia with permanent residency or you have applied for permanent residency, you are generally eligible to join Medicare and gain immediate access to health care services. You can also purchase residents' private health insurance.
What type of cover should I purchase?
Visa type
Health insurance type
Student visa
Overseas Student Health Cover will meet your visa requirements.
457 visa
457-compliant Overseas Visitors Health Cover will meet your visa requirements.
485 visa
485-compliant Overseas Visitors Health Cover will meet your visa requirements.
Any visa with condition 8501
457- or 485-compliant Overseas Visitors Health Cover will meet the visa requirements for health insurance requirement Condition 8501. Other types of Overseas Visitors Health Cover or international cover may also meet requirements.
Any other visa
If you don’t have any form of Medicare benefits or you have reciprocal Medicare benefits, you can purchase Overseas Visitors Health Cover from an Australian or international insurer;
If you have a blue (interim) or green (full) Medicare card, you can purchase Australian residents' private health insurance.
Tips on health insurance for visitors
Benefits, membership costs and eligibility can vary greatly between funds and insurance policies. When buying any health insurance take care to ensure the cover you select is suitable for your needs.
Make sure that you are aware of the waiting periods of the policy you purchase. Most insurers will impose a 12 month waiting period for cover on pre-existing conditions, and some will not cover them at all. Because OVHC policies generally commence when you arrive in Australia, illnesses that develop while you are travelling to Australia are usually considered to be pre-existing ailments.
Check the restrictions and exclusions of the policy. Not everything will be covered in full and some items may not be covered at all. Remember that hospital costs for overseas visitors, even in a public hospital, are generally higher than $1,000 per day.
Consider taking out the highest level of hospital cover you can afford. You can choose to pay a higher excess if you do require treatment rather than having a restriction to save money on premiums.
Check how much your policy will cover for pharmacy as most policies only have limited cover and will not adequately cover high-cost drugs such as those used as chemotherapy drugs in cancer treatment, which can cost tens of thousands of dollars.
If your visa status or Medicare eligibility changes inform your fund as soon as possible. Check with them that your policy is still suitable, as you may be able to swap to a residents' policy.
Keep your policy paid & up to date. If your policy falls behind in payments, your fund may refuse claims or cancel your membership.
If you're anticipating treatment, contact your fund and find out whether you will be covered and how much you will need to pay yourself. If you need treatment which isn't covered by your insurer, ask the service provider to find out how much you will need to pay out of your own pocket. If possible, ask for a written quote.