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Private Health Insurance in Australia

Updated on August 17, 2013


Australia has one of the best and comprehensive public healthcare systems in the world - A recent study ranked Medicare (Australia's public healthcare system) second after the Dutch healthcare system in terms of benefits and coverage it offers to residents.

However, like almost any other nation, residents do have the option of taking out private health insurance in addition to mandatory Medicare benefits in order to reap some additional coverage which is not covered under Medicare. Additionally, private health insurance can be tailored to suit individual needs - one can cover themselves for either just a ride on an ambulance to hospital, or just admittance to a private hospital or merge a few components and take out 'hospital and extras' cover. Regardless of what level of health insurance you take out, there're advantages of doing so including tax benefits past the age of 31.

Why's Medicare Not Enough?

Let's look at what Medicare offers and how it is different from what's covered on a private-health insurance policy:

1) Medicare only covers you for treatment at a public hospital and does not give the option of choosing your own doctor. In addition, Medicare does not allow you to choose which hospital you'd like to go to. A private hospital cover allows you to choose a doctor of your own choice and also lets you select the hospital he or she attends (whether it is public or private).

2) There's a common misconception that Medicare covers ambulance - this is not true! An ambulance can cost anywhere between $500.00 to $700.00 per trip and is usually an out of pocket expense. You can cover the cost of a ride on an ambulance with cheap private health insurance (by way of only covering yourself for one annual trip). Prices for this type of cover can vary, but based on my limited research, HCF can cover you for an ambulance ride for $30.00 per year.

3) While Medicare allows you to be treated as a public patient even if you may have private hospital cover, it almost always never gives you a private room. Under private health insurance, you can choose to be treated in a private room in a hospital of your choice (subject to availability) and Medicare would usually reimburse you 75% of all costs - These costs however do not include any theatre and private patient fees, pharmacutical/drug consultations, prosthesis or even treatment required within an ICU (Intensive Care Unit).

4) Depending on your private health insurance policy, you might be eligible to redeem costs incurred for hospital or specialist treatments overseas. While Medicare does have recirpocal arrangements with a few countries (including the UK, Canada, France and New Zealand) for offering travellers urgent public medical care, this is not always guaranteed.

Different kinds of Private Health Cover

In Australia, health insurance providers usually provide 3 kinds of policies:

Ambulance Only

As the name suggests, this cover only covers you for a single trip each year on an ambulance trip. This cover is especially useful in states like New South Wales, Victoria and the Australian Capital Territory where Medicare does not subsidize ambulance travel. An ambulance can cost anywhere between $500.00 and $700.00 in NSW, ACT and VIC and hence it makes sense to spare some change to cover yourself just in case. Ambulance-only health covers are fairly cheap and can cost anywhere between $20.00 to $40.00 per year.

Hospital Cover

Many health-insurance providers offer hospital-only private patient cover which includes ambulance-trips.

Hospital covers offer subscribers access to private patient cover and the choice of their own doctor with the option of adding some extras if they're willing to pay for it.

Due to the competetive nature among Australian Health insurance pricing, hospital covers can cost anywhere from $60.00 to $70.00. Prices can increase depending on inclusion of extras in the policy.

Hospital and Extras Cover

This cover is the most comprehensive of the three with health insurance holders having the option of choosing how many extras they're willing to pay for. Nor all extras are necessary. For example, a male would have absolutely no need for pregnancy and IVR related extras on their health insurance policy while a young and reasonably healthy individual might not feel the need to include psychiatric and optometrist related services on their policy. In other words, comprehensive policies can be tailored towards individual needs. While thorough research may lead you to finding some cheap comprehensive health insurance premiums, you should expect to pay anywhere between $80.00 to $100.00 each month on basic Hospital + Extras cover.

For example, HCF's basic Hospital + Extras cover costs roughly $76.00 per year for a 25 year old non-smoking single male.


Australian private health insurance providers offer policies to individuals, couples and families - with substantial savings possible on the latter.

While Medicare does address most needs, taking out private health insurance is not a bad idea, especially considering that the Federal Government does offer a 30% rebate on premiums. Taking out private health insurance also reduces the Medicare Levy Surcharge liability (which is on top of the 1.5% Medicare Levy charged to all taxpayers across the country).

Taking out private health insurance also has other tax savings on the policy holder. For example, if an individual takes out private health insurance before July 1st following their 31st birthday, they'll be exempt from paying 'Lifetime Health Cover' loading which is a 20% loading on their premium and continue to go up as they get older (the maximum loading being 70%).

All in all, taking out private health insurance is not bad idea considering the benefit it offers and careful screening of various options and providers should offer a decent deal on finding some cheap health insurance which might just come handy when you least expect it.

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    • Hackslap profile imageAUTHOR


      3 years ago from Sydney, Australia

      Thanks for the feedback mate!

    • funpakmaza profile image

      Leena Shah 

      3 years ago from Karachi, Pakistan

      Great Information Dear , Really helpful Article For Health Insurance ,

    • Hackslap profile imageAUTHOR


      4 years ago from Sydney, Australia

      Thanks for the feedback Sunshine ... I agree it's a rip off to charge for an ambulance but then it does serve as a deterrent against hoax callers ..after all the ambos are funded by us..the taxpayer ... I was watching Bloomberg -Street Smart this morning and apparently ObamaCare's run into some hot water again? ..(ie he initially said people would be able to keep their existing policies but it turns out they can't?) certain things about America never cease to amuse me

    • Sunshine625 profile image

      Linda Bilyeu 

      4 years ago from Orlando, FL

      The cost of an ambulance ride is out of control all over the world. Granted, many people would abuse the ride if it was free or cheap. I think they should charge according to the emergency. I'm sure that will never happen, but I like the idea. Great write up on aussie insurance. The US is finally catching up to y'all, we are just a bit slow at times.

    • Hackslap profile imageAUTHOR


      5 years ago from Sydney, Australia

      Thanks for reading and feedback guys. .. yes our health insurance industry (while not cheap and perfect) still does tick a lot of boxes .. America does have a long way to go in comparison with Australia when it comes to health insurance

    • PADDYBOY60 profile image


      5 years ago from Centreville Michigan

      Nice hub. Thanks for the info.

    • Michele Travis profile image

      Michele Travis 

      5 years ago from U.S.A. Ohio

      This is a great hub. I have known about Australia and their health insurance policy for a while now. What I don't understand is why America doesn't follow it. It costs less, it works well. Basically it is very good and doesn't drain the economy. It is the exact opposite of ObamaCare. Why don't we use that instead of ObamaCare? It makes no sense to me, none at all.

      I looked at health coverage in England, Switzerland, Australia, and other countries. The United States is 38 on the list.

    • Hackslap profile imageAUTHOR


      5 years ago from Sydney, Australia

      Im unsure about America.... but generally speaking ambo-rides aren't usually covered by the public system (Australia's no different but certain states here do give you coverage for ambulances)... good idea to check indeed :)

    • quildon profile image

      Angela Joseph 

      5 years ago from Florida

      You made a good point about the ambulance coverage. I have supplemental insurance in addition to Medicare. I'll have to check and see if the ambulance is covered. I know there's never a free ride.

    • Hackslap profile imageAUTHOR


      5 years ago from Sydney, Australia

      Hey CraftytotheCore..

      Cheers for the comment and reading ... so looks like while there're differences in how private health cover works in our two countries...the rip-off on flagging an ambulance is the same lol

      I hope your health insurers do give you the option of taking out ambulance cover .. might be a good idea you add it on your existing policy ..

      Hope the asthma doesn't strike again :)

    • CraftytotheCore profile image


      5 years ago

      Hi Hackslap!

      This was an interesting article and a comparison of how health insurance differs in America.

      I have private insurance in America. In 2011, I went to the emergency room for difficulty breathing. It turned out to be asthma which landed me in a hospital for a week. The ER (a separate building a town over) sent me by ambulance to the hospital. I ended up having to pay about $600 out of pocket in addition to the deductible for the hospital stay.

    • Hackslap profile imageAUTHOR


      5 years ago from Sydney, Australia

      Hey thanks for your mail and comments're very kind with your feedback :) ..

      I'll certainly be reading your hubs soon!..

    • Shyron E Shenko profile image

      Shyron E Shenko 

      5 years ago from Texas

      A very interesting hub Hackslap, I am sure glad that our ambulance does not charge Medicare patients. My husband's helecopter ride (Count Down to a Miracle) cost 5,000 dollars, without insurance.

      Voted-up, Useful and Interesting.


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