Best health insurance Australia

Australians can choose from three main types of health insurance policies – hospital cover, extras (or general) cover, and packaged cover that combines both hospital and extras cover. Or you can choose to take out hospital cover with one provider, and take out extras cover with a separate health insurer.

Hospital cover typically lets you choose to be treated as a private patient in either a private or public hospital. Exactly what you’re covered for depends on the policy and the tier of cover you select.

All hospital policies must be classified under one of four tiers – a gold, silver, bronze or basic. Gold provides the highest level of cover, and as the name suggests, a ‘basic’ policy will provide the lowest level of cover.

This tiered system makes it easier for consumers to compare different policies. However, your insurer can choose to offer a policy that provides cover above the minimum requirements of a particular tier. You’ll often see these policies promoted as Basic Plus (+) or Bronze Plus (+).

In 2023, the winners for hospital cover in each state are:

• Queensland – GMHBA
• NSW (includes ACT) – Phoenix Health Fund
• Victoria – GMHBA
• Tasmania – St.LukesHealth
• South Australia – Health Partners
• Western Australia – ahm
• Northern Territory – GMHBA

Extras cover, also known as general treatment or ancillary cover, is designed to help with the cost of health services not covered by Medicare. These services can include:

• physiotherapy
• chiropractic treatment
• home nursing
• dental treatment
• orthodontics
• speech therapy
• glasses and contact lenses.

While private health insurance policies provide different levels of extras cover, they are not classified under the same tiers as hospital cover. This makes it important to know what services you will be insured for under various policies – even those offered by the same health fund. Some policies may cover you for a wide variety of services, while others may cover just a few.

The common thread, according to the Department of Health and Aged Care, is that many extras policies only let you claim a percentage of costs for each service. For example, you may only be covered for 50% of the cost for dental treatments. Alternatively, there may be a limit to how much you can claim for the same service each year. As a guide, you could have a maximum limit of $500 for dental treatments in a given year.

Canstar’s Health Insurance Star Ratings have identified the best value health insurance for extras cover across each state and territory. The 2023 winners for extras cover are:

• Queensland – HCF
• NSW (includes ACT) – HCF
• Victoria – HCF
• Tasmania – HCF
• South Australia – Bupa
• Western Australia – HBF
• Northern Territory – HBF

If you’re looking for complete cover for your healthcare needs, one option can be to take out packaged cover. This combines hospital plus extras cover through a single policy with the same health insurer.

Dealing with just one health fund can have advantages. It may make it easier to manage monthly premiums, and streamline the process of making a claim on your health insurance. But it’s not essential to take out packaged cover. You are free to mix and match, purchasing hospital cover with one insurer, and extras cover with another. It’s an option that can allow you to closely tailor your health cover to your personal needs.

If you prefer the simplicity of having all your cover with the same fund, Canstar’s Health Insurance Star Ratings and Awards can help you narrow the search for the best packaged health insurance in your state or territory.

Our 2023 Awards winners for packaged health cover are:

• Queensland – HCF
• NSW (includes ACT) – Phoenix Health Fund
• Victoria – HCF
• Tasmania – HCF
• South Australia – HCF
• Western Australia – HCF
• Northern Territory – HCF

No matter what type of health cover you’re looking for – be it hospital, extras cover or both – it always makes sense to select the policy that suits your individual needs.

If you’re single for instance, you’re likely to have very different health care needs from a family. Conversely, the best health insurance for a young couple is likely to be quite different from a policy that’s well-suited to an older person.

The key to knowing what is the best health insurance for you is to check exactly what you are covered for. It can also help to consider your family history when selecting health cover. If older members of your family all need to wear glasses for instance, it may not be a bad idea to select extras cover that includes optical cover.

At the other end of the scale, you may be motivated to take out health insurance purely as a means of avoiding the Medicare Levy Surcharge (MLS). The MLS is an additional charge on top of the standard 2.0% Medicare levy. The extra cost can work out to be 1.0%, 1.25% or 1.5% of your taxable income each year if you are single and earn over $90,000 annually or more than $180,000 as a family. The income threshold will change for the 2023-2024 income year to over $93,000 for singles and over $186,000 for families.

Paying the MLS doesn’t entitle you to any additional services beyond what’s available through Medicare. However, the surcharge can be avoided if you take out private patient hospital cover. The ATO advises that for singles, an appropriate level of cover must have an excess of $750 or less. Couples or families must have an excess of $1,500 or less. It could be a wise idea to compare the cost of a Basic health insurance policy to the cost of the MLS, to see which is cheaper.