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The Average Cost of Private Health Insurance in Australia

Megan Fraser Updated: 04 October 2021
Types of Health Insurance

When you first start to review and compare health insurance policies, the price generally becomes a big part of your decision-making process. This is because there are so many different companies trying to compete for your business. Each of these insurers want you to buy a health insurance policy from them, which results in companies making promises on their pricing points while also highlighting the features and benefits that come with each plan.

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The price of health insurance typically depends on several factors like your location, the health fund you choose, and the level and cover amount you want. Understanding how your premiums are calculated and what to compare will make sure that your hard-earned money is spent on a health insurance policy that is suited to your specific requirements.

Key steps when looking for the best health insurance

  • Decide whether you’re looking for Singles, Couples or Family health insurance.
  • Assess your needs to determine whether you need Hospital only policy, an Extras only Policy or a combined policy that offers more features and benefits.
  • Contact a specialist health insurance broker for an obligation free quote to help you find the best policy for your requirements.

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Will health insurance save you money in the long run?

When you are purchasing health insurance for the first time, you may find that comparing offers from different insurers, and buying an affordable from the start will help you save in the long term. Take the time to shop around and find the best policy for your requirements.

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.

Ask your health insurance broker for the best health deals

Generally, it’s a good idea to check in with your health insurance broker from time to time to learn about the best deals. Occasionally, health insurance companies offer promotional deals and offers. By checking in with your broker, you’ll be able to find review your current coverto ensure you’re getting the best value for your money.

How much does Health Insurance cost?

Although the cost of private health insurance varies, you can generally expect to pay between $105.10 and $112.45 for a Basic Hospital policy for a single person living in NSW. Extras policies typically start at $16.75 and could go up to $188.50 depending on the type of Extras you choose as well as the insurer you buy your policy from.

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 $105.10 and $142.30 (April 2021).

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.

hi illustration 01

Compare Hospital insurance cost

Health InsurerBasic PlusBronze PlusSilver PlusGold
AHM 90
$105.10$135.55$203.20$259.25
Australian Unity 90
$107.70$131.75 $168.15 $284.90
bupa 90
$112.20$117.70$145.70 $252.00
GMHBA 90
$123.65$156.85 $246.75
HCF
$139.40 $211.75 $284.50
medibank
$112.45$124.65 $161.20 $224.90
NIB 90
$107.55 $120.64$212.32 $278.67
Peoplecare logo
$129.46 $234.79$237.70

Source: privatehealth.gov.au (6 April 2021).

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 NSW and excludes any LHC loading and rebates.

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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.

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 InsurerMinimum PriceMedium PriceHighest Price
AHM 90
$16.75 Black 50 saver$48.55 Classic Extras $115.55 Super Extras
Australian Unity 90
$33.35 Basic Extras $49.40 Standard Extras $188.50 Advanced 80% Extras
bupa 90
$18.60 Orange 50 $41.55 Orange 60 $185.75 Top Extras 90
GMHBA 90
$27.70 Basic Extras $41.15 Essential Extras $135.30 Top Extras 75% Benefits
HCF
$116.90 Starter Extras $42.50 Mid Extras$104.50 Top Extras
NIB 90
$29.93 Basic Extras $68.34 Core Extras $158.62 Top Extras
medibank
$30.30 Essential Extras 60 $53.25Essential Extras 75 $158.60 Top Extras 90

Source: privatehealth.gov.au (6 April 2021).

Take note: The above information is based on a monthly premium for an Extras policy for a single adult living in NSW.

ambulance illustration 03

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
bupa 90 $4.85
HCF $6.50
hbf 90 $8.00
medibank 90 1 $7.15
NIB 90 $6.33
Peoplecare logo $6.29

Source: privatehealth.gov.au (6 April 2021).

Take note: Cover is based on a single adult living in NSW 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$115.25
NSW$115.25
NT$67.95
QLD$118.30
SA$117.45
TAS$125.85
VIC$117.65
WA$98.15

Source: privatehealth.gov.au (6 April 2021).

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:

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 (April 2021). 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 (April 2021).
  • 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 (April 2021). 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.

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