What is private health insurance?

Medicare is a health insurance scheme paid for by Australians and supported by the Australian Government.

Medicare covers many health care costs, but private health insurance can provide more and varied treatment options.

For example, you might be able to choose your own doctor, be treated in a private hospital, or as a private patient in a public hospital. In some situations, it might mean you’re treated faster.

There is no evidence that private health insurance gets you better health care, or employs better doctors and nurses.

You will almost certainly have to pay a ‘gap’ fee. This is the difference between how much the doctor charges, and the combined cover provided by Medicare and your health insurer.

Types of private health insurance and coverage

There are two types of private health insurance:

• hospital cover: this covers treatment and accommodation in a hospital
• general treatment cover: also known as ‘ancillary’ or ‘extras’ cover, this can include things like dental work and physiotherapy.

Private health insurers offer several categories of both hospital cover and general treatment cover. More things are covered if you choose a higher category, which costs more.

Private health insurance can also cover transport by ambulance in some states.

Things to consider when looking into private health insurance

If you choose to take out private health insurance, try to make sure that:

• advice to you about what is covered is given in writing
• you fully understand what types of health care is covered and what is not covered
• you fully understand how long it takes for any health conditions you already have to be covered by private health insurance.

Government surcharges and incentives

The Australian Government encourages people to take out and keep private health insurance through:

• the private health insurance rebate which reduces the cost of private health insurance
• the lifetime health cover loading which makes private health insurance more expensive if you take it out later in life
• The Medicare levy surcharge is charged if you earn above a certain income and do not have private health insurance.

Overseas visitors and students

Visitors to Australia are not usually covered by Medicare, but people from some countries can use Australia’s public health system for essential treatment.

It is wise to take out private health insurance in your own country. Another option is the overseas visitor health cover.

Some Australian visas require you to take out private health insurance.

If you are studying in Australia and have a temporary student visa, you might need to have overseas student health cover.

Who can help with a private health insurance problem?

You can use the Private Health Insurance Ombudsman for any private health insurance problem or enquiry.