Private health insurance in Australia: hospital and extras
Australian private health insurance splits into two completely separate products: hospital cover (for treatment as a private patient in a hospital) and extras cover (also called "ancillary", covering things Medicare does not, like dental, optical, and physiotherapy). You can buy them as a bundle from one insurer or separately, and you can have hospital cover from one insurer and extras from another - they are not linked products.
The whole system is heavily regulated. Insurers must accept anyone regardless of pre-existing conditions (community rating), they cannot exclude based on age once you have continuous cover, and they all use the same standardised tier system (Basic, Bronze, Silver, Gold) for hospital cover. This makes comparing easier than it looks once you understand the categories.
The four hospital cover tiers
| Tier | Typical monthly cost (single) | What is covered |
|---|---|---|
| Basic | $90 - $120 | Limited services. Usually excludes most surgery. Mainly bought to avoid the MLS |
| Bronze | $110 - $150 | Covers most common surgical needs except pregnancy, IVF, joint replacements, and a few others |
| Silver | $140 - $200 | Adds cataracts, joint replacements, dental surgery. Excludes pregnancy and IVF (those are Gold only) |
| Gold | $200 - $400+ | Covers everything, including pregnancy and birth, IVF, weight loss surgery |
Above the tier minimum, insurers can add extras or have higher excesses to vary the price. A "Silver Plus" policy might include some Gold features at lower cost; "Bronze with extras" might be cheaper but only suitable for specific situations. The free-text product names are marketing - the underlying tier is what matters.
Common extras cover features
- General dental: check-ups, cleans, fillings. Most policies cover 60-100% up to an annual limit ($500-$1,500)
- Major dental: crowns, bridges, root canals. Usually 50-60% up to a higher annual limit, with 12-month waits
- Orthodontics: braces, Invisalign. Highest-tier extras only, typically $1,500-$2,500 lifetime limit per child, 12-36 month wait
- Optical: prescription glasses and contacts. $150-$400 annual limit
- Physiotherapy, chiropractic, osteopathy: per-visit cap with annual limit
- Mental health: psychology sessions beyond Medicare's 10 subsidised sessions per year
- Acupuncture, naturopathy, remedial massage: some policies cover these as "natural therapies", though many insurers have dropped them since 2019
The Medicare Levy Surcharge: why a cheap policy still saves money
If your single income is above $97,000 or family income is above $194,000 (2025-26), you pay an extra 1.0-1.5% income tax called the Medicare Levy Surcharge (MLS) unless you hold an appropriate level of private hospital cover. For most higher earners, the cheapest hospital policy ($90-$120/month, $1,080-$1,440/year) is significantly less than the MLS would be, so taking it out saves money even if you never use it.
Lifetime Health Cover loading
If you do not take out hospital cover by 1 July following your 31st birthday, your premium increases by 2% for every year you delayed, up to 70%. The loading drops off after 10 continuous years of cover. This is why most high earners take out at least basic hospital cover at 31 even if they do not currently need it.
Frequently asked questions
What is the Australian Government Rebate on private health insurance?
The federal government rebates 8-32% of your premium depending on income and age. Lower earners and older policyholders get a higher rebate. The rebate is usually applied automatically when you buy the policy, so you pay the net amount. Higher earners get no rebate. The rebate income thresholds are slightly different from MLS thresholds, so high earners often pay full premium AND avoid the MLS.
Should I buy hospital, extras, or both?
Depends on your situation. Hospital cover only is the cheapest option and is enough for most healthy under-50s who want to avoid MLS and have access to private hospitals if needed. Extras only is rarely worth it unless you have predictable annual dental, optical, or physio costs that exceed the premium. Combined hospital + extras is the most common product and offers the best overall value for families.
How long do I have to wait before claiming?
Standard waiting periods are 2 months for general hospital services and ambulance, 12 months for pre-existing conditions and obstetric services (pregnancy), and 6 months for general extras. If you have continuous cover with a previous insurer, you carry your waiting-period credit across. Many insurers waive some waiting periods for extras when switching from a competitor.
What is the "agreement hospital" vs "non-agreement hospital" issue?
Each insurer negotiates rates with specific private hospitals. At "agreement hospitals", you pay no gap (or a small known gap). At non-agreement hospitals, you may pay thousands more out of pocket. Before booking elective surgery, always confirm the hospital is in your insurer's agreement network.
Can I buy private health on a temporary visa?
Most "Australian" private health policies require you to be a permanent resident or citizen. Temporary visa holders need OVHC or OSHC (covered in our Medicare comparison guide) which is a separate product. Some insurers offer "transitional" policies that switch from OVHC to standard health insurance when your PR is granted, preserving waiting-period credits.
How do I compare policies?
The official government comparison site PrivateHealth.gov.au is the only independent source - all other comparison sites (iSelect, Compare The Market, Choosi, etc.) earn commission and only show insurers who pay them. Always cross-check with the gov site before deciding.
What this calculator doesn't include
- Specific insurer pricing - actual premiums vary by insurer; use PrivateHealth.gov.au for live quotes
- Geographic variations - some insurers have state-based pricing that affects WA, QLD, NSW differently
- Corporate or association discounts - many employers and professional associations offer 5-12% discounts
- Combined policies for visa holders - OVHC/OSHC products which are a separate market
- Travel insurance - completely separate from private health cover
The official independent comparison site is PrivateHealth.gov.au; the regulator that handles complaints is the Commonwealth Ombudsman.