What is private health insurance?

Private health insurance is a type of insurance policy that provides cover for a variety of healthcare options and medical expenses, including costs that Medicare may not cover.

Australians wanting to buy private health insurance can choose hospital cover, extras cover, or a combined policy that includes both.

What are the benefits of private health cover?

Hospital cover

Hospital cover allows a patient to be treated in a private hospital, or to be treated as a private patient in a public hospital, generally with their choice of doctor. It can also cover a portion of the medical expenses involved when you’re admitted to hospital. Hospital policies are offered under “tiers” based on the categories of treatments they cover. Read more about the main tiers Gold, Silver, Bronze and Basic.

Extras cover

Extras cover helps with the expenses of other health services that Medicare does not cover. This could include allied healthcare, such as physiotherapy, chiropractic treatment, dental treatment, glasses and contact lenses. Some policies may also cover lifestyle benefits, such as gym memberships. Read more about extras cover.

Dental cover

Dental cover can help cover general dental treatments such as check ups, cleaning and fillings. It can also cover major dental procedures such as root canals and dentures. Read more about dental cover.

Medicare Levy Surcharge

The Medicare Levy Surcharge is a charge of up to 1.5% that is levied on Australian taxpayers who don’t have hospital cover and earn above a certain income. Read more about the Medicare Levy Surcharge.

Lifetime Health Cover Loading

The Lifetime Health Cover loading is designed to encourage Australians to take out hospital cover when they are young. It charges you a premium loading if you take out cover after your 31st birthday. Read more about the Lifetime Health Cover loading.

Private Health Insurance rebate

The private health insurance rebate can help you save on your health insurance premiums, depending on your age and how much you earn. Read more about the private health insurance rebate.

Looking for the best health insurance?

So how can you find the best health insurance policy for you? A good place to start when comparing private health insurance could be to work out what types of cover or other policy factors are important to you.

Health insurance has different levels of cover suited to different life stages and needs. For example, you may need a hospital policy that covers a particular medical condition, or you may want to ensure you have help paying for your children’s dental work. When considering your health insurance needs, questions you may like to consider could include:

What health insurance life stage are you at? (e.g. are you single, in a couple, or part of a family with children?)
Do you want extras cover? If so, what services do you spend money on now? What might you need in the future?
Do you or your family have any pre-existing conditions that need to be included in the cover?
What is your budget for premiums and excess payments?

Once you know what policy inclusions are important to you, the excess you are comfortable with and the premium price you can afford, it’s time to compare your options. Canstar can help you compare health insurance providers and make a shortlist of policies that could suit your needs the best, based on features and price.

How does Canstar compare health insurance?

Canstar compares thousands of eligible health insurance products. Every year, we perform a detailed analysis to help you choose a health insurance policy that includes hospital cover, extras cover, or both hospital and extras cover, to suit your household needs and budget.

Whether you’re looking for singles health insurance, couples health insurance, student health insurance, family cover or overseas visitors health insurance, Canstar can help.

Looking for cheap health insurance?

If you want a cheap health insurance policy, a good first step may be to compare premium quotes from a range of providers based on the level of cover you need. It’s important to also factor in the inclusions and exclusions for each policy you’re considering when shopping around. A cheap health insurance policy might save you money each month, but it’s important to make sure you have the hospital or extras cover you might need to avoid any surprises in the future. Is there a trade-off when it comes to the number of conditions and treatments you’re covered for, compared to a more extensive policy that may cost more? For example, for a cheap health insurance option you might decide on a Basic level hospital policy, but this would likely offer less cover than a Bronze, Silver or Gold policy would. It’s important to check your policy’s cover limits and excess too, so you’re aware of what you might need to pay out-of-pocket if you have to make a claim. It can also be a great idea to read through the Private Health Information Statement and other key documentation for your policy, to help with your decision-making.

What’s new in health insurance in July 2025?

From July 1, the income threshold for the Australian government’s private health insurance rebate has increased to $101,000 for singles and $202,000 for families, with $1,500 for each dependent child after the first.
Depending on you income, this may put you into a lower tier, which is a benefit in this case, as it may make you eligible for a higher rebate than you were on before.
Households are in for greater financial strain from April 1 as private health insurance hikes kick in, with customers facing average price rises of 3.73% – the steepest increase since 2018.
In a small additional sting for policyholders, the government’s private health insurance rebate has dropped down a notch, decreasing from a maximum of 24.608% to 24.288% for Australians under 65.
As a result, Canstar analysis shows someone with a single gold hospital policy previously paying $2,896 a year, could be staring down the barrel of a $121 price hike from April 1 if their premium rises by 3.73%.
A Canstar survey found that one in three Aussies with private health insurance have never switched providers, but that the majority who did switch in the last year ended up reducing their costs by $78.50 per month.
Canstar’s data insights director Sally Tindall says Aussies may be able to “minimise” the fallout from April 1 and potentially even save money just by switching insurers.

About the authors

Author: Josh Sale

Joshua Sale, Ratings Manager As Canstar’s Group Manager, Research, Ratings & Product Data, Josh Sale is responsible for the methodology and delivery of Canstar’s Health Insurance Star Ratings and Awards. With tertiary qualifications in economics and finance, Josh has worked behind the scenes for the last five years to develop Star Ratings and Awards that help connect consumers with the right health insurance for them.

Josh is passionate about helping consumers understand their health insurance and the importance of considering the level of cover they’re getting s well as the premium they’re paying. Josh has been interviewed by media outlets such as the Australian Financial Review, news.com.au and Money Magazine on a range of finance topics. You can follow Josh on LinkedIn, and Canstar on X and Facebook.

Author: Nina Rinella

As Canstar’s Editor-in-Chief, Nina heads up a team of talented journalists who research and write articles to provide our readers with valuable insights about private health insurance. Previously Nina founded her own agency where she provided content and communications support to clients around Australia for eight years. She also spent four years as the PR Manager for American Express Australia, and has worked at a Brisbane communications agency where she supported dozens of clients, including Sunsuper and Suncorp.

Nina has ghostwritten dozens of opinion pieces for publications including The Australian and has been interviewed on finance topics by the Herald Sun and the Sydney Morning Herald. When she’s not dreaming up ways to put a fresh spin on finance, she’s taking her own advice by trying to pay her house off as quickly as possible and raising two money-savvy kids.

Nina has a Bachelor of Journalism and a Bachelor of Arts with a double major in English Literature from the University of Queensland. She’s also an experienced presenter, and has hosted numerous events and YouTube series.

You can follow her on LinkedIn, or Canstar on Facebook.

You can also read more about Canstar’s editorial team and our robust fact-checking process.

Share this article

Related

Health insurance deals and sign-up offers

Mental health care plans – what are they? How many sessions do they cover?

Dental Loans in Australia: Loan Options for Dental Work

Quick Links