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Choosing private health insurance can feel a little like opening a menu with far too many options. Hospital, Extras, excesses, exclusions, waiting periods, limits, rebates. By the time you reach the bottom, choosing the first thing that looks affordable can become very tempting.
But health insurance is personal. A policy that works brilliantly for your colleague, partner or very enthusiastic neighbour may make little sense for you.
The trick is knowing what to look for before you start comparing policies. Who needs cover? What will you actually use? What isn’t covered? And are you getting genuine value, or just the lowest premium?
So, before you start comparing private health insurance, here are five questions worth asking yourself.
It sounds obvious, but start with the people rather than the policy. The Australian Government recommends considering who you need to cover, the type of cover you need and what you can afford. Your circumstances can influence not only the policy you choose, but the healthcare services you are likely to value.
Someone taking out cover for themselves might be focused on their own health needs and budget. A couple planning to start a family may need to think further ahead, while parents could be considering services such as dental, optical or orthodontics for their children. Later in life, those priorities may change again. The important thing is to think beyond today. You do not need a crystal ball, but it is worth considering who needs cover now, whether your family circumstances are likely to change and what healthcare needs might become more important over the next few years.
There are also some circumstances where choosing cover requires a few extra considerations.
If You’re New to Australia
If you have recently moved to Australia or are here on a temporary visa, your starting point may look different. Access to Medicare can depend on factors including your visa and country of origin, and some visas may require you to maintain appropriate health insurance while you are in Australia.
Rather than assuming a standard domestic Hospital or Extras policy is what you need, it is important to understand the requirements that apply to your circumstances. HIF’s guide to Overseas Visitor Health Cover in Australia explains how Medicare eligibility, visa requirements and Overseas Visitor Health Cover can fit together.
If You’re Approaching 31
Age is another factor worth understanding, particularly when it comes to Hospital cover.
Under the Australian Government’s Lifetime Health Cover rules, you may pay a loading on your Hospital cover premium if you take it out after your Lifetime Health Cover base day. Generally, the loading is 2% for each year you are over 30 when you take out Hospital cover, up to a maximum of 70%. After 10 continuous years of paying the loading, it can be removed. Lifetime Health Cover applies to Hospital cover, not Extras.
That does not mean everyone approaching 31 suddenly needs to rush out and buy Hospital cover. It does mean it is worth understanding how the rules apply to you before the birthday cake arrives.
Ultimately, the first question is not simply whether you need a singles, couples or family policy. It is who needs to be covered, what circumstances apply to them and what might change next. Once you have that clear, deciding what you actually want your health insurance to cover becomes considerably easier.
Once you know who you are covering, think about how those people actually use healthcare. Broadly, private health insurance in Australia can include Hospital cover, Extras cover, or a combination of both. Hospital cover helps towards eligible treatment when you are admitted to hospital as a private patient, while Extras can provide benefits towards eligible everyday healthcare services outside hospital, such as dental, optical and physiotherapy.
Rather than looking for the policy with the longest list of inclusions, think about the healthcare you already use and anything you reasonably expect to need in the next few years.
Think about… | Ask yourself… |
Hospital | Which hospital treatments might matter to me now or in the future? |
Dental | Do I attend regular check-ups or expect major dental work? |
Optical | Do I wear prescription glasses or contact lenses? |
Physiotherapy | Do I use physio regularly for sport, injury or other needs? |
Psychology | Is this a service I want included in my Extras? |
Pregnancy and birth | Is starting or growing a family part of my plans? |
Orthodontics | Could braces or other orthodontic treatment be relevant to my family? |
Pharmacy | Would eligible pharmacy benefits be useful to me? |
Once you have that list, you have something meaningful to compare policies against. You can then explore the services included across different levels of Extras cover and Hospital cover, rather than choosing cover based on inclusions you may never use.
The goal is not to be covered for absolutely everything. It is to understand what matters to you and make sure the cover you are paying for reflects it.
This is where comparing health insurance becomes less exciting, but considerably more important. Two policies can sit around a similar price point while providing different levels of protection. Looking only at the monthly premium can therefore hide some of the details that matter when you actually need to use your cover. It is recommended to check what a policy includes, restricts or excludes.
Before choosing, make sure you understand:
- Waiting periods: how long you may need to wait before claiming certain benefits. If you’re new to cover, upgrading or changing policies, understanding how health insurance waiting periods work before you switch can help avoid surprises later
- Exclusions: hospital treatments for which your policy pays no benefits.
- Restrictions: services where only limited benefits are payable.
- Excesses and co-payments: amounts you may agree to contribute when receiving hospital treatment.
- Annual limits: the maximum benefits available for particular Extras services over a specified period.
- Potential gaps: costs that may remain after Medicare and your insurer have paid applicable benefits.
- Hospital agreements: whether your insurer has an agreement with the hospital you plan to use.
The difference between an exclusion and a restriction is particularly important. An excluded hospital treatment receives no benefit under the policy, while a restricted treatment only receives limited benefits. That distinction can make a considerable difference to what you pay if you need treatment.
It may be the least glamorous part of choosing health insurance, but this is one occasion where reading the fine print really does deserve the cliché. It is much better to understand what your policy does and doesn’t cover while comparing options on the couch than when you are arranging treatment.
There is nothing wrong with having a budget. Health insurance needs to be affordable enough to keep, but the lowest premium does not necessarily represent the best value.
A cheaper policy may be exactly what you need if it covers the things that matter to you. On the other hand, saving a little each month becomes less appealing if you regularly use services with limited benefits, or discover that something important to you is not covered at all.
Once you understand the inclusions and conditions we covered above, look at the bigger picture. Consider:
- whether the benefits reflect the healthcare services you are likely to use
- how easy it is to claim and manage your cover
- the level of customer support available
- any additional member benefits or programs you would genuinely use
- whether the overall package feels worthwhile for the premium you are paying.
There may also be government incentives and tax considerations that affect the overall cost of private health insurance. Depending on your age and income, you may be eligible for the Australian Government Private Health Insurance Rebate, while some higher-income earners without appropriate Hospital cover may need to consider the Medicare Levy Surcharge. Because thresholds and circumstances can change, it is worth checking the current Australian Government information when weighing up the cost.
Value can also extend beyond helping with treatment after something goes wrong. For example, eligible HIF members with certain Extras products can access Healthy Lifestyle Cover, which can provide benefits towards approved healthy lifestyle services and programs, subject to the applicable cover, limits and requirements.
This is why asking for the “best health insurance in Australia” rarely produces one useful answer. The better question is whether you are getting enough value from your cover for the things that matter to you.
The final question requires looking slightly beyond the person you are today.Health needs change. So do families, jobs, budgets and priorities.
You might start a family, have children who later need orthodontics, develop different healthcare needs, move interstate or begin thinking differently about your health as retirement approaches. The Australian Government specifically recommends reviewing private health insurance when circumstances change, including starting a family, earning more, developing a serious health condition or when adult children are no longer covered by a policy.
That does not mean buying every possible level of cover today because something might happen in 2041. It means understanding that some changes require planning. Pregnancy is a good example. Hospital policies can exclude pregnancy and birth-related services, and waiting periods may apply when upgrading cover.
If private hospital treatment for pregnancy is something you may want in future, it makes sense to investigate the relevant cover before you need it rather than afterwards.
Think of health insurance as something to review, not something to choose once and then leave untouched in the administrative drawer of life.
There is no universal answer. Whether private health insurance is worth it depends on your circumstances, including your age, income, family situation, healthcare needs, budget and what you value from your cover.
Hospital cover can provide greater choice around eligible private hospital treatment, while Extras can help towards eligible everyday services such as dental, optical and physiotherapy. There are also financial considerations, including Lifetime Health Cover and, depending on your income and circumstances, the Medicare Levy Surcharge. But private health insurance does not make every healthcare cost disappear, which is why understanding your inclusions, limits and potential out-of-pocket costs matters.
Perhaps the better question is: does my cover give me enough value, choice and support for what I am paying?
At HIF, we also believe health insurance can play a role before something goes wrong. We aim to take a proactive approach to member health and wellbeing, with support that can extend beyond treatment itself. Depending on their cover and eligibility, members may be able to access benefits through HIF’s Healthy Lifestyle Cover, alongside Health & Wellbeing Programs designed to support members across a range of health needs. For practical information and ideas for looking after your health day to day, members and readers can also explore the HIF Health Hub’s Healthy Lifestyle resources.
Ultimately, choosing private health insurance is not about finding the longest list of inclusions or automatically choosing the lowest premium. It is about understanding what matters to you, knowing what you are paying for and choosing cover that fits your life.
And because life has a habit of changing the plan, the five questions you ask today are worth asking again from time to time.
What is the best health insurance in Australia?
There is no single health insurance policy that will be best for everyone. Compare policies based on the people you need to cover, the hospital treatments and Extras services that matter to you, your budget, applicable excesses and limits, and any likely changes to your healthcare needs.
The Australian Government provides an independent comparison service through PrivateHealth.gov.au, which can be useful when comparing registered Australian health insurance policies.
How do I compare private health insurance in Australia?
Start by deciding whether you need Hospital cover, Extras or both, then compare policies on more than premium alone. Check inclusions, exclusions and restrictions, waiting periods, excesses, Extras limits and potential out-of-pocket costs.
You should also consider the practical side of membership, including claiming, policy management, customer service and any additional health and wellbeing support that matters to you.
What should I look for when choosing family private health insurance?
Think about the healthcare needs of the whole family now and what could change in the next few years. This could include pregnancy and birth services, dental, optical, physiotherapy or orthodontics.
Also check who can remain covered as a dependant, the limits applying to Extras benefits and any waiting periods that could affect services you expect to use.
What’s the difference between Hospital and Extras cover?
Hospital cover helps pay towards eligible treatment when you are admitted to hospital as a private patient. The treatments covered depend on your policy.
Extras cover provides benefits towards eligible non-hospital healthcare services, which can include dental, optical and physiotherapy depending on the policy. You can purchase Hospital or Extras separately or combine the two.
What is Lifetime Health Cover loading?
Lifetime Health Cover is an Australian Government initiative designed to encourage people to take out Hospital cover earlier in life. If you take out Hospital cover later than your LHC base day, you may pay an additional loading on your Hospital premium.
The loading is generally 2% for each year you are over 30 when you take out Hospital cover, up to a maximum of 70%, and it can be removed after 10 continuous years of paying it. It does not apply to Extras cover.
Can I change my health insurance provider?
Yes. You can change health insurers, although it is important to understand how the move affects your cover. If you move to equivalent or lower Hospital benefits, waiting periods you have already served are generally protected under portability rules. Waiting periods may apply to new or higher benefits when upgrading your cover.
Check the details of both policies before cancelling your existing cover so you understand exactly what will change.
How often should I review my health insurance?
There is no single required schedule, but it makes sense to review your cover regularly and whenever your circumstances change.
Starting a family, children growing up, changing healthcare needs, moving, retirement or simply realising you are paying for benefits that no longer suit you are all good reasons to check whether your policy still fits.