Is private health insurance worth it?
Find out how private health insurance works in Australia and if it’s right for you, now or in the future.
Do I need private health insurance?
Like many things in life, there’s no easy answer to this one. While we’re lucky to have a pretty good public hospital system here in Australia, there’s also lots to love about private health insurance. Ultimately, your personal circumstances, stage of life and values will be the best judge of how much private health insurance could benefit you.
Advantages of private health insurance
Everyday health needs can pack a punch to your budget – and things seem to always happen all at once. One day you’re fine - the next you have a toothache, your back is out, and to top it off, little Jimmy lost his glasses, again.
Extras cover can be a great way to take away some of the wallet sting when these inevitable health hiccups happen.
Hospital cover is great for peace of mind. We all hope we’ll never have to use it, but it does bring a level of comfort to know that if you do end up needing to be admitted to hospital, private hospital cover will give you options as to how you want to be treated.
Health cover that suits your season
Getting hospital cover earlier in life has its perks, such as being eligible for the age-based discount or avoiding the Lifetime Health Cover (LHC) loading.
Extras can help to maintain your health without breaking the budget. Getting some money back on expensive services can make things like dental, physio, optical and psychology a lot more accessible.
Cover, your way. There’s lots of affordable options available if you want to take out private health insurance for yourself. Remember that single policies aren’t only for single people - it just means that the policy only covers one person. If you're a couple with different health needs or budgets, it could be better value to each have your own cover.
Cover just for you two. Why not make the life admin a little easier with a couples policy? With a wide range of great value hospital and extras covers, you can find something you both like, at a price you can both afford.
Plus, if you're higher income earners, you can get hospital cover as well as potentially avoiding the Medicare Levy Surcharge (MLS). Talk about having your cake and eating it too!
Pregnancy can be full of unknowns. Having cover with pregnancy and birth can bring some peace of mind knowing that you’ll be able to choose your own obstetrician and recover and navigate your first days with a newborn in the privacy of your own room (subject to hospital availability).
There’s nothing more important than your family, right? Family health cover is there to support you and your crew when you need it most. The number of children covered on your policy won't change your premium, so you can add the whole family band without worrying about any additional cost.
Hospital and extras cover for peace of mind to meet your family's needs.
Some GMHBA hospital covers also feature no excess for child dependants under 21 when admitted to a private hospital, giving you one less thing to worry about.
Should I get private health insurance?
Your individual circumstances can affect your decision about if, and when, you take out private health insurance. Premiums vary based on a range of factors, such as state, policy type, level of cover and people covered on the policy. It’s worth mentioning that private health insurance has a Community Rating System created by the Australian Government, which means that your premium cannot be influenced by your health status or claims history, unlike life or car insurance for example.
Your age
- If you're 18-29, you could receive an age-based discount on your hospital premium
- If you’re over 30, Lifetime Health Cover loading may apply to your premium if you haven’t held hospital cover before the 1 July following your 31st birthday
Your income for rebate and surcharge purposes
Depending on your income, you will be able to determine the rebate you will receive and whether taking out health insurance is an effective way to avoid the Medicare Levy Surcharge (MLS).
- The Australian Government Rebate on Private Health Insurance is the amount that the government contributes toward your health insurance premium, either in the form of an offset refunded at tax time or a premium reduction. How much you get is tiered based on your income level. Learn more about the rebate.
- Medicare Levy Surcharge (MLS): If your income is over 93k (single) or 186k (couple/family/single parent) and you don’t have hospital cover, then you could be liable to pay more in your tax depending on your income. Learn more about MLS.
Your health needs - present and future
What do you need cover for now? Or might need down the track? Finding the right cover at the right time means you’re only paying for what you need. Having said that, it pays to think ahead about what you might want covered in the future, so you’re not waiting to use your cover when you need it.
For example:
- Do you have a condition you want cover for? If it’s pre-existing, a 12 month wait could apply if your cover is new or you’re upgrading to a higher level of hospital cover.
- Are you planning to start a family in the near future? 12 month waits apply for private hospital cover for pregnancy and birth services, so it’s a good thing to plan ahead where you can. Extras cover can help with the cost of physio and remedial massage during pregnancy (noting that these services both have a 2 month waiting period if you weren’t previously covered for them).
Private health insurance options
There’s two types of private health insurance that you can take out – hospital cover and extras cover. Private health insurance products contain different services and benefit levels.
Hospital cover
Want more control of your healthcare journey? Hospital cover offers peace of mind, such as being able to choose your doctor. For procedures where you have been admitted into hospital, such as an elective surgery or giving birth, you would be covered for accommodation costs and meals in hospital, as well as theatre costs.
Hospital cover has minimum inclusions set by the Australian Government. There’s four levels of hospital cover (called product tiers). Each product tier must include certain clinical categories. Each clinical category contains the Medical Benefit Schedule (MBS) item numbers for services that are covered under it. For example, to be classified as a Silver hospital product, the cover must include a minimum of 26 clinical categories of unrestricted services and 3 restricted services.
- Restricted services means that a service is only covered to a limited extent, and if you’re treated as a private patient in a public hospital or in a private hospital, you may end up with large out-of-pocket expenses. You can find more information about restricted services on your product fact sheet and fund rules.
- Unrestricted services mean that you will be covered in a private hospital setting.
Extras cover
Extras cover (sometimes called ancillary or general treatments) is there to help pay part of the cost of services that you can’t claim from Medicare, such as dental, physio, optometry and other health services. Policies vary based on the types of treatments covered and the benefit amount that's available to claim each year. We have a variety of options to suit both your needs and your budget.
Health insurers are only able to pay benefits on approved treatment types, but there’s no minimum inclusions required in the same way as hospital cover. See what types of extras services can be covered.
Hospital and Extras cover
Why not both? You can choose to combine Hospital and Extras to be covered for a wider range of benefits.
You can mix and match levels of cover depending on what your needs are, for example, having a medium hospital cover level with a high level of extras cover.
The GMHBA member experience
We’re serious about ensuring members have a positive experience and see value in their cover.
We aim to make health insurance uncomplicated through easy-to-understand policies and transparency. We put all our cards on the table.
We're all about making sure members know we care and are always striving to do our best and beyond. We seek genuine feedback with member surveys and act on it.
Want to hear from actual members? From glowing reviews through to those highlighting where we can improve, ProductReview.com.au has independent reviews from our members so you can see for yourself.
Worth a look: A real member story featured in one our recent campaigns.
Frequently Asked Questions
The best age to take out cover will vary from person to person. There’s perks to starting earlier in life however, with the age-based discount available to 18-29 year olds on hospital cover premiums.
There’s also Lifetime Health Cover (LHC) loading to consider. It's an additional loading on your hospital premium of 2% for every year that you didn’t take out hospital cover from 1 July following your 31st birthday. It’s a government initiative used to motivate younger people to take out and maintain hospital cover.
Once your income ticks over $93k (single) or $186k (couple/family/single parent) per year, the Medicare Levy Surcharge (MLS) could apply if you don’t have hospital cover.
The Australian Government Rebate on Private Health Insurance is there to assist with the cost of private health insurance. Your income tier and the age of the oldest person on your policy are used to determine the rebate you can receive.
You're able to claim the rebate if you:
- are eligible for Medicare
- hold a complying health insurance policy; and
- have a taxable income for surcharge purposes.
Times are tough, we get it. The best way to get value for your money is to make sure you’re covered for what you need. If you haven't lately, reviewing your cover to make sure it still suits your needs can go a long way. If you’re thinking of making the switch to GMHBA, we have a wide range of value covers to suit your needs.
If you’re a current GMHBA member and thinking about suspending or cancelling your membership, we’d be sorry to see you go, but we’re here to help with whatever you need. It’s a good idea to understand what the flow on effects of suspending and cancelling may be first (such as MLS, LHC, re-serving waiting periods etc). Get in touch and we can walk you through it.
Private health insurance hospital cover can help to:
- Receive treatment as a private patient, in a private hospital
- Reduce waiting time for elective surgery by choosing to be treated in a private hospital
- Have a say in who treats you. When it’s your health in question, being comfortable with your doctor and having a choice can become very important, very quickly
- Offer the peace of mind of being able to choose hospital cover to support you with existing or potential health issues (noting that 12 months pre-existing conditions waits do apply for new to health insurance, or newly included clinical categories due to an upgrade).
It could be. But again, this depends entirely on your personal circumstances.
If your income is more than $93k (single) or $186,000 (couples/families) per year, then you could be hit with the Medicare Levy Surcharge (MLS) if you don’t have hospital cover. How much you pay depends on how much you earn, but it ranges from 1-1.5% of your annual income that’s paid to the government at tax time. This is on top of the regular Medicare Levy that Australians pay in their taxes each year.
MLS is a Federal Government initiative to reduce the load on the public system by encouraging use of the private hospital system. If MLS applies to you, you can choose to take out a private health insurance hospital policy to avoid this additional levy. If your total hospital premium is less than what you would have to pay in MLS, you could come out better off. It’s always worth getting financial advice from a tax professional though if you’re not sure.
With hospital cover, it's important to understand your policy and what is and isn’t covered.
Medical out of pocket costs: This is simply the difference between the benefit that GMHBA and Medicare pay and what the provider charges you. Learn more about out of pockets.
Excess: If you have hospital cover, this is the amount of money that you would need to pay the hospital as part of the accommodation costs of your admission before benefits would be paid. Get more information about excess levels.
Government surcharges and discounts: There can be benefits to taking out hospital cover (depending on your personal circumstances), such as - avoiding the Medicare Levy Surcharge (MLS) for high income earners, eligibility for the age-based discount or avoiding the Lifetime Health Cover (LHC) loading.
Learn more about the benefits of having private health insurance.