AHM
Australian Unity Health
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HIF
NIBWhen you start to review and compare health insurance policies, the price generally becomes a big part of your decision-making process.
The price of health insurance depends on your location, the health fund you choose, and the level and cover amount you want. For example, the average cost of private health insurance for a Basic Hospital plan for a single adult living in NSW is between $96 to $115.15 per month, while Extras only costs between $14.30 and $29.61 per month (February 2020).
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Will health insurance save you money in the long run?
For many Australians, the peace of mind that private coverage brings is worth the cost. Others prefer to save the money they would have spent on health insurance premiums, only using it for health expenses.
Consider how much money you’ll have to save to pay for future medical expenses that are not covered by Medicare. Add that annual amount to the Lifetime Health Cover (LHC) loading and Medicare Levy Surcharge (MLS) you must pay. If these costs are lower than what you’ll pay in premiums a year, then the cost of health insurance might not be worth it for you.
Health insurance policies vary from insurer to insurer. Luckily, it’s a very competitive market. You can shop around and compare policies from major health funds to find a plan best suited to your requirements and budget.
How is your health insurance cost calculated?
Health insurance premiums usually have a base calculation, and then depends on your chosen provider and personal requirements. For example, the average cost of private health insurance for a combined Basic Hospital and Extras policy with a $750 Excess for a single adult living in NSW is between $110.50 and $142.30 (February 2020).
Other factors influencing your health insurance cost, include your LHC loading (if applicable), the hospital Excess and co-payment you pay and the rebate you can claim at tax time.
Take note: Health insurance premiums increase every year on the 1st of April.
How the type and level of coverage affects your premium
Your specific requirements and family dynamic should provide you
with an indication of the level and type of coverage you need.
For example, do you want a policy that covers your preferred doctor or
specialist? Are you planning to get pregnant and want protection for a
broader list of birth-related benefits? Do you have kids that need
braces, or are you approaching the age where you need to consider joint
replacement surgery and hearing aids?
Generally, Hospital cover
costs more than Extras cover. However, if you combine the two options
into one policy from the same insurer, you might be able to save.
Hospital insurance
Private Hospital policies fall into 4 categories; Basic, Bronze, Silver and Gold. Each group includes a minimum number of services it must cover and a list of exclusions and restrictions.
- Gold: Most comprehensive policy, covering 38 clinical categories. Generally, the most expensive hospital plan that includes pregnancy and birth-related services.
- Silver: A mid-level hospital policy that covers 29 clinical categories, including dental surgery and heart-related services.
- Bronze: An affordable policy covering 21 clinical categories. Generally, excludes joint replacements, as well as services for the back, neck and spine.
- Basic: The cheapest hospital plan that covers you for accidents and helps you avoid paying the MLS and LHC loading.
With a Hospital policy, you usually have to pay an Excess amount when admitted to hospital. The higher your Excess, the lower your health insurance premium will generally be. You typically have the choice of a $0, $250, $500 or $750 Excess for a single adult, depending on your insurer. Some insurers’ also charge a co-payment, which is the amount you agree to pay each day you’re in the hospital.
Take note: Depending on your insurer, Basic Hospital policies might not be available without Extras cover. If your Hospital policy has a ‘Plus’ it means it provides additional benefits on top of the minimum number of services it must provide.
Compare Hospital insurance cost
| Health Insurer | Basic Plus | Bronze Plus | Silver Plus | Gold |
 | $99.60 | $127.55 | $197.00 | $231.45 |
 | $102.70 | $130.20 | $155.35 | $268.90 |
 | $115.45 | $209.35 | $213.70 | |
 | $126.39 | $207.60 | $246.61 | |
 | $118.80 | $192.80 | $209.85 | |
 | $133.19 | $204.52 | $235.62 | |
 | $99.22 | $118.22 | $205.25 | $260.50 |
 | $125.50 | $220.50 | $231.50 |
Source: privatehealth.gov.au (17 February 2020).
Take note: The above information is based on a monthly premium for a Hospital policy with a $750 Excess for a single adult living in Queensland and excludes any LHC loading and rebates.
Extras cover
Extras insurance pays a benefit for general treatments and services received outside of the hospital. There are 3 broad categories you can choose from; Basic, Mid and Top. However, different insurers might have different names for their Extras options.
- Basic: Generally, the most affordable option covering essential treatments with a lower annual limit. For example, general dental, physio and optical.
- Mid: A medium-level policy with increased annual limits for a long list of treatments.
- Top: The most comprehensive Extras option, covering an extensive list of general treatment and services, generally, provides the highest benefit limits.
Take note: Extras cover cannot help you avoid paying the MLS and LHC loading, you’ll need a Hospital policy for that.
Compare private health insurance cost for Extras cover
| Health Insurer | Minimum price | Medium Price | Highest price |
| | $17.20 Black 50 saver | $40.30 Classic Extras | $108.00 Super Extras |
| | $29.20 Basic Extras | $45.50 Standard Extras | $164.25 Advanced 80% Extras |
| | $18 Orange 50 | $39.75 Orange 60 | $165.30 Top Extras 90 |
| | $26.63 Basic Extras | $40.37 Essential Extras | $125.05 Top Extras 75% Benefits |
| | $18.75 Starter Extras | $100.90 Top Extras | $100.90 Top Extras |
| | $41.57 Core Extras | $151.26 Top Extras | |
| | $32.01 Simple Extras | $65.33 Mid Extras | $114.15 High Extras |
Source: privatehealth.gov.au (17 February 2020).
Take note: The above information is based on a monthly premium for an Extras policy for a single adult living in Queensland.
Cost of ambulance cover in Australia
If you live somewhere, that requires you to pay for ambulance services, for example, Victoria and ACT, you might need a policy that provides ambulance cover.
Ambulance cover is generally included in Hospital and Extras policies. However, select insurers do offer ambulance only cover options.
Compare ambulance-only premiums
| Insurer | Monthly Ambulance premiums |
| | $4.70 |
| | $6.95 |
 | $7.75 |
 | $7.00 |
| | $6.20 |
| | $5.65 |
Source: privatehealth.gov.au (17 February 2020).
Take note: Cover is based on a single adult living in Victoria looking for emergency ambulance cover only.
The price of health insurance in different States of Australia
Heath insurance premiums vary according to where you live. Your location affects the price of your health cover, because of competition between funds, your state rules and the cost of living in your area.
Average cost of health insurance by State
| State | The average monthly premium for a Basic Hospital & Extras policy |
|---|---|
| ACT | $119.46 |
| NSW | $119.18 |
| NT | $74.13 |
| QLD | $120.30 |
| SA | $118.18 |
| TAS | $118.41 |
| VIC | $119.98 |
| WA | $99.56 |
Source: privatehealth.gov.au (17 February 2020).
Take note: Cover is based on the average monthly premium for a single adult purchasing a combined Basic Hospital and Extras policy.
Tax and health insurance
There are three financial tax incentives the Australian government uses to persuade you to purchase private health insurance.
Lifetime health cover (LHC) loading
The LHC loading requires you pay an additional 2% on your health insurance premium (up to 70%) for each year you did not have Hospital cover after the 1st of July following your 31st birthday. This loading can only be removed after you’ve held a Hospital policy for 10 consecutive years.
Medicare Levy Surcharge
Should you decide not to purchase private health insurance, you’ll pay an additional 1% to 1.5% MLS fee on your taxable income. The percentage depends on your income threshold. You can avoid the Medicare Levy Surcharge by purchasing a Hospital insurance policy.
The private health insurance rebate
Get up to 33.413% back on premiums when you qualify for a private health insurance tax return. This rebate can generally be claimed as an upfront reduction on your premiums or as a refund through your annual tax return. The deduction percentage you’re entitled is calculated on your age and expected taxable income for the financial year.
Take note: Rebate percentages are adjusted yearly on the 1st of April.
Tips for finding cheap health insurance
Generally, the best way to find more affordable health insurance in Australia is to:
- Do your research and know the benefits you want your health plan to cover. If you only wish to avoid the LHC loading and MLS, then a Basic Hospital plan might suffice.
- Shop around and compare costs from some of the major health funds available in your state.
- Consider a higher Excess to reduce your monthly premiums. However, make sure you have that amount of money saved and ready when needed.
- Consider combining plans into one policy purchased from the same insurer; this may result in a discount.
- Pay your annual premium as a lump sum before the 1ste of April to avoid the yearly price increase.
- Check to see if you can join one of the restricted health funds suited to your industry, for example, the Teachers Health and Defence Health Limited.
- Pick the plan most suited to your stage of life and budget.
Frequently asked questions
How do you pay your health insurance?
Generally, you can pay your health insurance weekly, monthly or yearly via direct debit, credit card, the fund’s online membership service, a cheque in the mail or BPay. However, payment arrangements differ from insurer to insurer.When do health insurance premiums increase?
Every year, on the 1ste of April, the price of health insurance rise. The cost of health insurance in Australia generally goes up due to the increasing cost and usage of health services and requests for new technologies.Is the cost of health insurance deductible?
Sort of. You might be able to claim the private health insurance rebate as a refundable tax offset when lodging your tax return. Alternatively, you can get a reduction on the amount of premiums you pay your insurer.How much does health insurance for a family cost?
The average cost of a combined Silver Hospital ($750 Excess) and Extras policy for two adults with children living in NSW is around $390.75 to $485 per month (as at 17 February 2020). However, the price you’ll pay depends on the state you live in, the health fund you choose and your specific requirements.How much is health insurance a month for a single person?
For a single adult, without dependents, living in NSW, you can expect to pay between $110.50 and $142.30 a month for a Basic combined Hospital ($750 Excess) and Extras policy (17 February 2020).What is the average cost of health insurance for a married couple?
Couples wanting a Bronze Hospital policy ($750 Excess) with minimum Extras generally pay between $292.62 and $312.92 per month (as at 17 February 2020). Start comparing similar policies from major health funds to decide which one offers the best value at an affordable price.What is the cheapest health insurance to avoid the MLS?
To avoid paying the 1% to 1.5% Medicare Levy Surcharge, you generally need to purchase a Basic Hospital plan, which is usually the cheapest option.
Hello there,
I am an Australian national and am looking to move back to Australia from the UK with my Panamanian national wife. She will be awaiting her partner visa to be approved in the first couple of years. We may fall pregnant in this time, and would like to be covered for pregnancy related health care costs in the event of this happening. What would our options be? Any help would be much appreciated
Hi Joel.
You might want to consider purchasing a more comprehensive private health insurance policy that includes pregnancy and birth-related services. Please note, that there is generally a 12 month waiting period from when your policy starts to when such benefits will become available.
If you’d like to request some quotes, please fill in the form above.
I am 66 years old and I left Australia on a temporary work deployment in January 2018 and expect to return in December 2019. I suspended my Medicare and cancelled my Private health Insurance when I left. Could you please tell me what my LHC loading will be when I return?
Hi David.
Because I don’t know the age you were when you first obtained private hospital coverage, I cannot calculate your current Lifetime Health Cover loading. However, you can use the Australian Government Private Health Insurance Ombudsman calculator to help you. You can find it here.
Hi. I am a New Zealand citizen looking at the possibility of emigrating to Australia in the next couple of years. I am 59 years old.
What would be my situation regarding health care? Would I have any assistance should the need arise as Australians do here in NZ?
Looking forward to your information
Many thanks
Hi Greg.
Australia has a Reciprocal Health Care Agreement (RHCA) with New Zealand and as such if you are a New Zealand citizen you’ll be eligible for Medicare that covers hospital care only. You won’t get coverage for general treatments outside of hospital under the RHCA and might want to purchase private health insurance extras for things like dental, optical and physiotherapy. If you require additional information please visit the Australian Government Department of Human Services website.