Hospital cover is ideal for individuals and families who value the peace of mind that comes with knowing they have financial protection in the event of hospitalisation or major medical procedures. It can be particularly appealing to those who prefer to have more control over their healthcare choices, including choosing their doctor or specialist.
Key facts
- Hospital coverage works by providing coverage for treatments and services within a hospital.
- Pros of hospital cover include access to free or subsidised medical services, reimbursement of Medicare Benefits Scheme fees, avoidance of penalties, reduced waiting lists, and savings on the Medicare Levy Surcharge.
- To save on hospital coverage, choose an appropriate coverage level, consider higher co-payment or excess options, and purchase before turning 31.
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What is Hospital Cover?
Hospital cover is a type of health insurance generally covering the costs of in-hospital treatments, including accommodation. Depending on the level of coverage you choose, it can provide benefits for basic services like lodging or extensive procedures like surgery. It’s important to note that hospital coverage does not include coverage for services outside of a hospital, such as general practitioner visits.
How does Hospital cover work?
Hospital coverage works by providing coverage for treatments and services within a hospital. Private hospital policies can cover expenses such as doctor fees, operating theatre fees, pathology services, and accommodation in private hospitals. However, it’s essential to understand the specific coverage offered by your plan before signing up, as it may not always be fully comprehensive.
Hospital Product tiers and what they cover
- Basic Hospital cover: Ideal for avoiding the Medicare Levy Surcharge or Lifetime Health Cover Loading. It covers palliative care, hospital rehabilitation, and hospital psychiatric services.
- Bronze Hospital cover: Offers coverage for basic services and additional benefits such as brain procedures, ear, nose, and throat treatments, hernia and appendix surgeries, etc.
- Silver Hospital cover: Provides comprehensive coverage, including benefits from the bronze level, as well as services for heart, lung and vascular system, back, neck and spine treatments, dental surgery, etc.
- Gold Hospital cover: The highest level of coverage, including benefits from basic, bronze, and silver categories, as well as coverage for pregnancy, birth and neonates, joint replacements, chronic pain management, etc.
Private health insurance hospital cover and the Medicare Levy Surcharge
In Australia, as a taxpayer, paying a Medicare Levy of 2% on your taxable income is generally required. However, if you do not have appropriate private health insurance, you may also be subject to an additional charge known as the Medicare Levy Surcharge (MLS). The MLS is calculated as a percentage ranging from 1% to 1.5% of your income and is paid in addition to the Medicare Levy.
The percentage of the surcharge you are liable for depends on your income threshold, whether you are a single individual or part of a family unit. This includes couples, single parents, and de facto couples. To determine the amount of Medicare Levy and MLS you must pay, it is important to understand your income level and consult the relevant income thresholds.
Lifetime Health Cover Loading and Hospital cover
Lifetime Health Cover (LHC) Loading incentivises individuals in Australia to obtain private health insurance before the age of 31. Complying with LHC Loading rules offers benefits such as access to high-quality healthcare from a young age and avoiding financial penalties. Individuals can lock in lower premium rates by securing private health insurance early, proactively managing their health, and addressing existing conditions. It is a proactive step towards ensuring comprehensive health coverage, better health outcomes, and long-term financial security.
Pros and Cons of Hospital cover
What Isn’t Covered by Private Hospital Cover
While health insurance covers most healthcare expenses, most plans may not cover certain services. This includes treatments, services, sessions, or procedures conducted outside a hospital setting. Other exclusions may include cosmetic procedures, fertility treatments, and certain prescription medications. However, you’ll typically be able to purchase an Extras policy which could help you cover these costs.
Compare and Review Hospital Policies
The table below shows the monthly costs of various hospital cover policies provided by different health insurance brands:
Insurer | Basic | Bronze | Silver | Gold |
 | $117.20 – $122.65 | $121.95 – $142.00 | $258.15 – $292.45 | $257.20 – $317.00 |
 | $108.80 – $115.25 | $121.80 – $154.15 | $150.80 – $183.55 | $302.95 – $331.80 |
 | N/A | $117.50 – $142.15 | $144.45 – $258.10 | $283.90 – $315.65 |
 | $110.54 – $133.53 | $123.68 – $134.30 | $157.05 – $274.89 | $297.22 |
 | $107.65 – $114.35 | $130.40 – $160.10 | $165.30 – $207.95 | $314.80 – $335.80 |
 | $109.40 – $118.75 | $133.05 – $161.90 | $200.85 – $216.90 | $222.75 – $299.5 |
 | $108.10 – $116.55 | $124.90 – $132.40 | $230.45 – $255.70 | $283.80 – $299.80 |
 | N/A | $163.11 – $178.92 | $218.01 – $228.02 | $254.24 |
Source: Privatehealth.gov.au (June 2023; Premium estimates for a single individual living in NSW)
Comparing Hospital Policies
When choosing the right Hospital policy for your needs, carefully comparing different options is important. Here are some steps to help you make an informed decision:
- Identify your healthcare needs: Start by understanding your specific healthcare requirements. Consider age, existing medical conditions, and anticipated treatments or procedures.
- Coverage levels: Hospital policies typically offer different levels of coverage, such as basic, bronze, silver, and gold. Assess the coverage details of each policy level and determine which one aligns best with your healthcare needs.
- Services and treatments: Review the list of services and treatments covered under each policy. Ensure that the policy covers the essential treatments you may require, such as surgeries, hospital stays, rehabilitation, and specialised services relevant to your health condition.
- Waiting periods: Take note of the waiting periods associated with each policy. Waiting periods are when you must wait before claiming benefits for certain treatments or services. Compare waiting periods across different policies and consider how they align with your immediate and future healthcare needs.
- Costs and premiums: Compare the costs and premiums associated with each policy. Consider factors such as monthly premiums, excess amounts, and out-of-pocket expenses. Assess your budget and choose a policy that balances affordability and comprehensive coverage.
- Provider network: Evaluate the network of hospitals and healthcare providers associated with each policy. Ensure that your preferred healthcare providers and hospitals are included in the network, allowing you to receive treatment from trusted healthcare professionals.
- Additional benefits: Look for any additional benefits or extras the policies offer. These could include benefits like ambulance cover, access to specific treatments or therapies, and discounts on allied healthcare services.
- Customer reviews and ratings: Research customer reviews and ratings for the insurance providers offering the Hospital policies. This can provide insights into customer service, claims process, and overall customer satisfaction.
How to save on your Hospital cover
If you’re looking to save on your hospital cover, consider the following tips:
- Choose a lower level of coverage if it suits your needs.
- Opt for a higher co-payment or excess option, which can reduce your premium.
- Purchase hospital insurance coverage before turning 31 to avoid Lifetime Health Cover Loading.
- Claim all applicable rebates and benefits to maximise your savings.
Frequently Asked Questions and Answers
What does hospital cover cover?
Hospital cover covers in-hospital treatments and services, including accommodation, surgeries, specialist consultations, and diagnostic tests. The specific coverage will depend on the level of hospital coverage you choose. Basic hospital cover typically includes essential treatments, while higher-level policies offer more extensive coverage for various medical services and procedures.
Is it worth having hospital cover?
The decision to have hospital coverage depends on your circumstances, healthcare needs, and preferences. Having hospital cover can give you greater control over your healthcare choices, access to private hospitals and specialists, reduced waiting times, and financial protection against unexpected medical costs. It can be particularly beneficial if you have specific healthcare needs or want to avoid potential penalties, such as the Lifetime Health Cover Loading or the Medicare Levy Surcharge.
Do I need private hospital coverage in Australia?
In Australia, private hospital coverage is not mandatory, as the government provides free healthcare through the public system (Medicare). However, private hospital coverage offers additional benefits and choices that public healthcare may not provide. It can be especially valuable if you prefer private hospital facilities, want faster treatment access, or seek coverage for services not fully covered by Medicare.
Is it better to have hospital or extras covered?
Choosing between hospital or extras coverage depends on your healthcare needs and priorities. Hospital cover focuses on in-hospital treatments and services, while extras cover provides benefits for ancillary services like dental, optical, and physiotherapy. Hospital cover may be more suitable if you primarily require coverage for hospital-related expenses, such as surgeries or specialist consultations. Conversely, extras coverage can be more beneficial if you need coverage for non-hospital services. Some people combine both types of coverage with a combined policy for comprehensive coverage.
Why is hospital coverage so expensive?
The cost of hospital coverage can vary depending on factors such as coverage level, age, location, and insurance provider. Several factors contribute to hospital coverage, including the increasing cost of healthcare services, medical technology advancements, higher hospital fees, and the risks and claims history associated with specific treatments. Insurance providers also consider these factors when setting premiums to ensure they can adequately cover the costs of providing healthcare benefits and services to policyholders.