Health Insurance

Australians are entitled to free treatment in public hospitals, however private health insurance does have its advantages;

  • You can choose your own doctor and specialists
  • Choice of hospital and a private room
  • Shorter waiting times for elective surgery
  • Payment for some costs not covered by medicare
  • Cover the medical gap where the doctor fee is more than the Medicare rebate
  • 30 percent rebate from the Government
  • General treatment policy holders cover you for ancillary treatment such as physiotherpy, dental

The disadvantages of private health cover includes;

  •  It can be expensive
  • You may still need to pay for a ‘gap’ or excess
  •  Waiting periods for some services – for example you might have to wait 12 months before you can claim dental treatment

Types of Health Insurance

There are two type of health insurance[

1. Hospital Cover– which covers the treatment by your doctor and hospital costs such as theatre fees and accomodation.

2. General Treatment Cover – this is often known as extra coverwhich provides payment for services such as physio therapy, optical treatment, dental, pharmacuticals, podiatry and other treatments

3. Combined Cover – is when health insurance funds package both hospital and general treatment. You can often choose what types of services and level of cover you require depending on your personal requirements.


The cost of private health cover varies based on the type of cover and the number of benefits and services selected.

Hospital cover costs depends on the the level of cover you choose. Most health insurance companies offer Top, Medium, Basic or Public private hospital cover. The services differ between each level of cover. The higher the insurance premium the more service are available, lower excess fees or ‘gap’ payment.

General treatment cover depends on the number of services selected and if you would like to have the waiting period excluded from the policy. A waiting period is a predetermined time where you cannot claim for a service. For example, most funds will apply a 12 month waiting period on dental treatment.

The Medical Gap

This is the out-of-pocket expense when a doctors medical services is greater than the Medicare rebate. Health funds now cover this expense in some of their policies. Check with your health insurance provider if your doctor paticipates in a gap scheme and if you are covered.

Goverment Incentives

The Australian goverment provides a number of incentives to take up private health insurance. They offer;

  •  A 30% rebate for hospital and general treatment cover
  • Life time health cover (LHC) is an inccentive to avoid paying a 2% loading on your private health for each year aged over 30. The policy must be maintained until the age of 65.  This encourages people to take out health insurance earlier in life. For example, if you wait until you are 40, you could be paying a 20% loanding or at the age of 55 years, your loading could be 50%.
  • Medcare levy surcharge  levied on Australian tax payers who generate an income of $77,000 for individuals or $154,000 for families if they do not take out private health insurance. The surcharge is calculated at the rate of 1% of taxable income.

What To Look Out For

  • Always ask questions about your policy. Find out what is included and excluded
  • Be sure to select hospital cover and the optional extras you require.
  • Find out if waiting periods apply to services selected
  • Find out any excess fees you may have to pay
  • Is there a gap and find out if your doctor participates in a gap scheme
  • Compare costs and services between a number of health insurance companies

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