Compare Basic health insurance

The basic level of private health insurance is the lowest tier of cover and provides you with the minimum of cover for treatment received as part of a hospital admission. Still, it does cover you for some things.

There are 38 categories of treatment defined in the four-tier structure, as listed on the Federal Government’s website privatehealth.gov.au.

It lists the minimum requirement for basic hospital cover as:

• Rehabilitation – Physical rehabilitation related to surgery or illness. For example, stroke recovery and cardiac rehabilitation (restricted).
• Hospital psychiatric services – Treatment and care of patients with psychiatric, mental, addiction or behavioural disorders. For example, schizophrenia, depression, eating disorders, addiction therapy and post-natal depression (restricted).
• Palliative care – Providing quality of life care for a patient with a terminal illness, including treatment to alleviate and manage pain (restricted).

Note though that such cover will be offered on a restricted basis. That means you’re partially covered for hospital costs as a private patient in a public hospital. You may incur some significant out-of-pocket expenses. For example, you won’t be covered for a private room in a public hospital or any room in a private hospital.

If you only have basic hospital cover, it’s a good idea to check with your insurer and hospital for details of any fees and other charges you may incur before getting any treatment.

If you’re signing up for a new policy, or upgrading an existing policy, you may find there are waiting periods before you can make any claim, anything from two to 12 months, depending on the condition.

You should read carefully any policy documents to see what is and what isn’t included in any basic private health insurance.

Basic health insurance won’t cover you for any of the other 35 categories of treatment that form part of the bronze or higher tiers of private health insurance.

They include:

• Brain and nervous system
• Eye (not cataract)
• Ear, nose and throat
• Tonsils, adenoids and grommets
• Bone, joint and muscle
• Joint reconstructions
• Kidney and bladder
• Male reproductive system
• Digestive system
• Hernia and appendix
• Gastrointestinal endoscopy
• Gynaecology
• Miscarriage and termination of pregnancy
• Chemotherapy, radiotherapy and immunotherapy for cancer
• Pain management
• Skin
• Breast surgery (medically necessary)
• Diabetes management
• Heart and vascular system
• Lung and chest
• Blood
• Back, neck and spine
• Plastic and reconstructive surgery (medically necessary)
• Dental surgery
• Podiatric surgery (provided by a registered podiatric surgeon)
• Implantation of hearing devices
• Cataracts
• Joint replacements
• Dialysis for chronic kidney failure
• Pregnancy and birth
• Assisted reproductive services
• Weight loss surgery
• Insulin pumps
• Pain management with device
• Sleep studies

Your insurer may decide to include some of the other categories of treatment, that’s where you might consider a ‘basic plus’ level of cover. Some providers refer to them as ‘basic+’ policies.

A basic plus (or basic+) offers you some extra categories of treatment, but not enough to push the policy into another tier of cover, such as bronze. You may have to pay more for a plus policy.

What extra categories of treatment are offered can vary between providers so you may have to shop around to find a policy that suits your needs and your pocket.

Again, you would be wise to read carefully any policy document to see what is and isn’t covered in any basic plus policy.

A basic health insurance policy may be a good way to start you on any private health journey. You can upgrade your cover at time to suit your health needs and your budget.

The Federal Government offers incentives, such as the Private Health Insurance Rebate, to cover some of the cost of premiums, if you are eligible. The rebate is income tested, so the amount you may get will depend on your income and maybe reduced if you are a high earner, or you might not be entitled to any rebate at all.

If you don’t have any private health insurance then you may be charged a Medicare Levy Surcharge. Again, the levy is means tested, but the Australian Taxation Office (ATO) says the higher your income the more likely you will have to pay the surcharge of up to 1.5% on your taxable earnings.

You may also be charged a Lifetime Health Cover loading if you haven’t taken out any private health insurance before the age of 31, and then later decide to take out a policy. This will add to the premiums you will have to pay for cover.

So there may be some financial advantages to taking just the basic level of health insurance cover. This all depends on your health needs and your financial situation, so you might want to consider getting some independent financial advice.

How much any basic private health insurance costs will depend very much on you and your situation, including your age and in what state or territory you live.

It will also depend on whether you are single or seeking any couples of family cover, and whether you want any extras cover for non-hospital treatments.

You can compare private health insurance policies with Canstar using the table at the top of this page, which allows you to filter your options.