Health insurance

Private health insurance can help you pay hospital and medical costs not covered by Medicare. In some cases, you can receive treatment sooner by electing to be treated as a private patient.

Premiums increase on 1 April

Each year on 1 April the cost of private health insurance premiums changes.

For 2026, the average premium increase is 4.41% - higher than the average for 2025. The increase is to reflect the rising costs of providing medical and hospital services, which includes:

• around $20 billion paid out for hospital treatment, and
• $6.7 billion paid out for general treatment.

While the average increase in health insurance premiums is 4.41%, the average premium change per insurer varies from less than 2% to almost 6%.

No matter what your premium cost, it’s a good idea to periodically review your health insurance policy, compare it to others on offer, and decide whether the one you have is still the right one for you.

Types of health insurance

There are three main types of private health insurance. Knowing the difference between each can help you choose the right cover to suit your needs.

Ambulance cover

This is the most basic type of cover. It covers the cost of transport in an ambulance in an emergency.

Medicare does not cover the cost of emergency transport or other ambulance services although some state and territory governments cover the cost of ambulance services for residents without private health insurance. 

Otherwise, you can organise ambulance cover, through a health insurer or in some states and territories, from the state ambulance authority.

Hospital cover

Hospital cover can help with some of the costs of staying in hospital. The costs covered will depend on the level of cover you have. The levels of cover range from basic to top level. Check what the inclusions are before signing up.

It's important to know that you can still choose to be a public patient in a hospital if you have private health insurance.

Extras cover

Extras cover (also called general treatment or ancillary cover) is for out-of-hospital medical treatments. This can include services such as physiotherapy, optical and dental. There are a lot of other services that policies might cover, including acupuncture, dietetics, hearing aids, psychology and vaccinations. Generally, the more services the policy covers, the more expensive it is.

Combined health insurance covers you for both hospital and extras under the one policy.

Choosing a health insurance policy

Once you've decided what level of cover you need, compare different providers and their policies.

Before you sign up, think about:

• Who the cover is for — You can take out policies for singles, couples and families.
• How much you can afford — Use our budget planner to work out how much money you can spend on health insurance.
• What extras you need — You may want to prioritise certain extras. For example, if everyone in your family has glasses, you may want a policy that covers optometry.
• How long the waiting period is — Most health funds have a waiting period before you can claim on any services. The length of the waiting period often depends on the type of medical treatment you receive.

Be honest about your health history when you sign up to a policy. If your insurer believes you have misled them, they may not pay your claim.

Health insurance surcharges and incentives

Medicare levy and surcharge

Most Australians pay the Medicare levy of 2% of their taxable income as part of their tax. If you don't have private health insurance and earn more than the threshold, you may pay an extra surcharge. This can be up to 1.5% of your taxable income.

If you're on a high income, it may be cheaper to buy the insurance than pay the surcharge. See the Australian Taxation Office (ATO) website for more information on the Medicare levy surcharge.

Lifetime Health Cover (LHC) loading

The LHC loading is a government initiative to encourage Australians to get health insurance before they turn 30. For every year after you turn 30 that you haven't been insured you'll pay a 2% loading on top of your premium.

You only need basic hospital cover to avoid LHC loading. 

Age-based discount

Some insurers offer a discount for new and existing customers aged 18—29. The discount can be up to 10% off your premiums until you turn 41 (when it then reduces by 2% per year). 

If you change policies or insurers, ask your insurer if your existing discount will continue to apply to the new product.

Making an insurance claim

If you receive treatment that's covered by your insurance, you can make a claim. Some healthcare providers process claims on the spot. If your provider doesn't, lodge the claim with your insurer online or over the phone.

Out of pocket expenses

Sometimes your insurance won't cover the full cost of a treatment. The amount you pay out of your own pocket is known as a 'gap'. Some insurers offer gap cover to help you with these payments.

Waiting periods

Remember to check the waiting periods in your insurance policy. If you receive treatment and try to make a claim within the waiting period, your insurer will not cover the cost.

Problems with your health insurance

If you're unhappy with your health insurance policy or provider, there are steps you can take.

Talk to your insurer

The first step is to talk to your insurer. Explain the problem and how you'd like it fixed.

Make a complaint

If the problem isn't fixed, make a formal complaint in writing to your insurer. See how to complain for help with this.

If the problem is still not resolved, contact the Commonwealth Ombudsman to make a complaint and get free, independent dispute resolution.

Learn more about how private health insurance works, and how to compare policies to match your needs.