Your Ultimate Guide to Finding Private Hospital Cover

Published: October 2, 2018

According to the Australian Prudential Regulation Authority (APRA), as of June 2018, 45.1% of the Australian population has private hospital cover only health insurance. If you currently don’t have private hospital insurance, you might be wondering whether you need it if you already have Medicare.

Alternatively, maybe you already have private hospital insurance and are looking to review your cover and compare it to other leading health funds hoping to find better value for money.

This article provides a clear and straightforward explanation of what hospital insurance cover is, why you might need it and how to choose the best hospital cover only policy for your unique circumstances. Use this guide to help you make an informed decision you can feel confident with.

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What is hospital cover only insurance?

Private hospital cover is a type of health insurance that generally covers the costs associated with in-hospital treatments, including accommodation as a private patient in a public or private hospital. Depending on the level of cover you choose, hospital insurance might include ambulance services, pregnancy-related treatments, and prostheses.

Do I need private hospital insurance?

The most common reason Australians generally purchase hospital insurance cover before they turn 31 is to avoid the Life Time Health Cover (LHC) loading, which adds 2% on top of your premium. Other people might want private health cover to help them afford expensive medical services not usually covered by Medicare.

Hospital only cover could support you in having more control over your choice of hospital, doctor and scheduled treatment times.

Benefits of hospital cover only health insurance:

  • Avoiding the Life Time Health Cover Loading
  • Saving on the Medicare Levy Surcharge
  • Your choice of doctor and hospital
  • Possibly reducing the waiting list for elective surgeries
  • Claiming a tax rebate on the premiums paid

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Pros and cons of relying solely on Medicare for in-hospital services

Pros Cons
A range of free or subsidised medical services in a public hospital as a public patient. You usually can’t choose your doctor and will be treated by whoever is appointed to you.
Even when you are privately insured, can still choose to be treated as a public patient You might not have the option of deciding when you'd like to be scheduled for treatment.
Generally, when doctors bulk bill Medicare reimburses up to 100% of the cost of the Medicare Benefit Scheme (MBS) fee when visiting a GP outside of the hospital. Typically, excludes the cost of examinations for life insurance, superannuation and other memberships for which someone else is responsible.
Usually a 85% reimbursements of the MBS fee for a specialist. However, specialists could charge you more. Medicare doesn’t cover medical and hospital costs incurred overseas.
Public hospitals have access to a wide range of equipment and specialists Australia-wide Any elective or cosmetic services not clinically necessary will not be covered.
- Ambulance services are not included.

What does hospital cover include?

Private hospital insurance generally covers the cost of in-hospital services performed by a doctor, as well as accommodation and theatre fees. However, you might pay an excess when being admitted, please check the fund's SIS. Depending on the level of cover you choose and how much your doctor charges, your policy might cover the cost of the remaining MBS fees not covered by Medicare. Some funds also include gap cover which helps reduce your out-of-pocket expenses for treatment in hospital.

Important: As of April 2019, hospital insurance policies will need to adhere to a new classification system, namely Basic, Bronze, Silver and Gold. All Hospital policies must now have a minimum requirement of restricted cover for:

  • Palliative care,
  • Hospital rehabilitation, 
  • Hospital psychiatric services.

Each health fund has different names for the various levels of hospital insurance cover they provide. However, as of 2019, the government has implemented standard definitions for procedures and therapies for all hospital policies to make it easier for us to understand exactly what is as is not covered. Policies will now be classified into 4 categories:

Gold / Top hospital cover

This comprehensive option usually has no restrictions or exclusions on any medically necessary hospital treatments, providing the highest level of coverage and usually costs the most. Services typically covered include everything in the medium hospital package, plus major services, like:

  • Major eye surgeries
  • Pregnancy-related services and IVF,
  • Heart surgeries,
  • Prostheses, including artificial hip and knee joints and heart valves,
  • Dialysis for chronic renal failure,
  • Weight loss surgeries, and
  • Emergency and non-emergency ambulance cover

Silver / Medium

The Silver plan, or "middle option",  excludes a number of high-cost services like cataract surgery, dialysis and pregnancy, but is usually a bit more affordable than the Gold cover option. However, this hospital plan must cover certain services, including dental surgery, cardiac surgery and spinal surgery.  Depending on the health fund you choose, certain higher-cost services could still be included and ambulance cover might be comprehensive, restricted or capped.


More exclusions, however still covers many common procedures and general surgeries. A Bronze hospital policy will generally cover you for joint reconstructions, removal of appendix, tonsils and hernias, and chemotherapy. 

Basic hospital cover

This is generally the cheapest option with the most restrictions and exclusions. However, this hospital plan might be a good fit if you just want to avoid the MLS and LHC loading. Usually offers accommodation as a private patient in a private or public hospital and your choice of treating doctor, as well as some ambulance services.

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Is private hospital cover worth it?

Hospital insurance might be worth it for you if you:

  • Are approaching an age where severe illness and injuries are more likely.
  • Have illnesses that run in your family and want to make sure that you’re covered for treatments should you need it.
  • Prefer to be treated as a private patient in a private or public hospital.
  • Want to choose the doctor who treats you.
  • Prefer a private room when recovering from surgery or childbirth.

How to compare hospital cover health insurance

To compare hospital cover options and find the best value hospital cover policy suited to your specific requirements, you generally first need to determine what level of cover fits your circumstances by taking your health and budget into consideration. After that, request quotes from a variety of leading health funds and review the Standard Information Statement (SIS) of the options you’re most interested in.

As a general guide, consider the hospital services most claimed according to the June 2018 APRA quarterly statistics report:

  • Acute hospital treatments. A medical condition, injury or episodes of illness that comes on suddenly and requires immediate, but short-term treatment.
  • Hearts surgeries, including pacemakers
  • Hip replacement, and
  • Knee reconstruction.

How much does hospital only health insurance cost?

Your premium is generally dependent on the health fund and level of cover you choose, the co-payment you agree to and where in Australia you live.

A co-payment is the amount of money you agree to pay for every day you're in the hospital. Generally, the higher your co-payment, the lower your premium.

Where in Australia you live will also affect the price of your policy. For example, you could pay more for the same plan when residing in NSW compared to Western Australia. The percentage of a health fund's membership per state is an indicator of how important that specific territory is to each health fund’s business.

You could potentially reduce the cost of hospital cover by:

  • Choosing a lower level of protection; basic or middle instead of the top policy.
  • Going for a higher co-payment or excess. An excess is the money you’re willing to pay upfront for the hospital treatment.
  • Purchasing hospital insurance cover before your 31st birthday and thus avoiding the LHC loading.
  • Claiming a rebate at tax time.

What is the cheapest hospital insurance only cover?

Generally, the most affordable private hospital only cover option is a basic hospital cover plan for which you’ve chosen to pay a high excess and/or co-payment amount.

Some of the cheapest basic hospital cover options

Health fund Premium per month
GMHBA Basic Plus Hospital $500 Excess $90.67
Nib Basic Essential Hospital Plus $750 Excess $97.71
HCF Accisent Only Basic $750 Excess $101.10
Australian Unity Simple Hospital $750 Excess $102.50
Medibank Basic Accident and Ambulance $750 Excess $96.05
Bupa Lite Hospital $750 Excess $106.45

Above was calculated on a single adult (with full or interim Medicare) living in Western Australia taking out a basic hospital cover policy as at May 2019. The calculations above do not take the MLS or LHC loading into account. 

Frequently asked questions and answers

How do you claim hospital insurance?

Generally, the hospital where you received treatment will request payment straight from your private health fund, who then pays the costs they provide cover for, and you then pay the difference, if there is any.

Do I need hospital cover to avoid the Medicare levy?

Yes, most private hospital policies will exempt you from having to pay the Medicare Levy Surcharge (MLS). However, make sure the health fund you choose meets the MLS requirements by reading their Standard Information Statement (SIS).

By applying the 1 to 1.5% surcharge to people that do not have private health cover, the Australian Government is hoping to reduce the high demand on the public system.

Do hospital plans cover pregnancy?

Generally, top hospital options will cover you for birth and pregnancy-related services, including accommodation. However, depending on the health fund you’ve chosen, medium packages might also include some or all birth-related expenses. The maximum waiting period for obstetrics is usually 12 months.

Ask an Expert?


  • Carol Scott |

    Is Friendlies Society Hospital in Bundaberg, covered for Private Hospital stay?

      Anneke Van Aswegen |

      Hello Carol.

      Whether a Hospital stay in the Friedly Society Private Hospital will be covered under your private health insurance policy, depends on which health fund you choose. According to the hospital’s website, they have a strong relationship with Bupa, Medibank, AHM, DVA, HBF, HCF, Australian Unity, Defence Health and many more.

      Before applying for health cover, enquire whether their policies provide for a hospital stay at Friedly Society Private Hospital in Bundaberg.

  • Diana |

    Are all in hospital scans covered by Bupa, when admitted as a private patient in Western Australia?

      Anneke Van Aswegen |

      Hi Diana.

      The scans Bupa will cover when you’re admitted to hospital generally depends on your policy type, level of coverage and the medical procedure you’re admitted for. You might want to visit Bupa’s website and navigate to their ‘Out of Pocket Tool’ for assistance.

  • chris |


    I am 35 and emigrated to Australia a year ago on PR. I recently received notice that I need to take out hospital cover or I will be subject to LHC Loading. My question is if I decide to wait another year to take hospital cover when I’m 36 will it be 2% from the date I registered for Medicare or would it be 2% for every year that I’m over 31? So, essentially 10%?


      Anneke Van Aswegen |

      Hello Chris.

      The Lifetime Health Cover loading is calculated on your base date, which takes into account when you became eligible for Medicare. As an immigrant, you usually have 1 year after you become eligible for Medicare to purchase Hospital cover. After 12 months, your LHC loading will apply based on your age. So, if you were born in 1984, before the 1ste of July, and became eligible for Medicare on January 2018 and have not yet purchased Hospital cover, your loading will generally be 8%, depending on your exact day and month of your birth. However, if you only became eligible for Medicare in 2019, you’re loading will not yet apply. Please use the lifetime health cover loading calculator to assist you.

  • Yeonghan Yun |

    Two boys are studying at boarding school in QLD and are basically covered by Medicare, as they have a resident visa. In the meanwhile, their parents are working in and outside of Australia.

    In this case, I am wondering which private insurance is better for two boys (year 10 and 12) in Australia. In addition, is it covered if they join private insurance now for treatment or surgery in Sep caused by previous accident occurred two months ago?

      Anneke Van Aswegen |

      Hi Yeonghan. Thank for reaching out.

      Please take note that purchasing child-only health insurance is very rare. A family health insurance policy might be a better option if you’re wanting to provide coverage to parents and children. Family health insurance generally covers all members for treatments received inside and outside of the hospital. However, the benefit amount that can be claimed depends on the level of cover purchased. Feel free to fill in the form above to request and compare health insurance quotes from a variety of health funds in Australia.

      Regarding your second question, typically health funds require members to serve a 12 month waiting period before claiming on pre-existing conditions.

  • lyn |

    I’m a 72 yr. old female and would like to have private hospital coverage.

      Anneke Van Aswegen |

      Hello Lyn.

      To provide you with a quote, we need a bit more information. Please fill in the quote form above and a health insurance specialist will give you a call to assist you in finding coverage suited your unique requirements. If you prefer speaking to a consultant immediately, kindly call 1300 795 560.