Our insurance experts reviewed all the Basic health insurance policies available in Australia to find the cheapest ones to suit people who have health insurance for tax reasons.
With the cost of living steadily rising and incomes not keeping pace, you might think about downgrading your health insurance. If you decide you don't need cover but want to avoid extra tax due to earning over $97,000 – or $194,000 for couples, single parents and families – these policies may be an option for you. We explain how to tell whether you're better off paying the Medicare Levy Surcharge (MLS) or paying for a Basic hospital policy.
Check our advice on whether you need health insurance to decide whether a hospital policy could reduce your tax bill.
On this page:
What does Basic hospital insurance cover?
Basic hospital insurance policies offer the lowest tier of health cover at the lowest price point. All Basic policies must cover treatment in a public hospital for palliative care, rehabilitation and psychiatric care.
These policies are good for avoiding tax and loadings once you reach a certain income, but they provide very little cover, so we don't recommend them for health cover.
There are two types of Basic policies: accident policies and public hospital policies.
Accident policies
The cheapest policy in each state is an accident-only policy, which covers accidents and ambulance. As a government requirement, these policies must also cover rehab, palliative care and psychiatric care in a public hospital – which means nothing more than you can choose your own doctor. And regardless of your cover, it's very hard to get a place in a public hospital for these services. All other services and illnesses are excluded.
Accident policies can also have restrictions. For example, HCF's Accident Only policy covers you for the initial treatment if you go to emergency within 24 hours after the accident, but you're not covered for any follow-up treatment.
Public hospital policies
The other type of basic hospital cover is a public hospital policy, these provide cover in a public hospital only. The only difference between this cover and what you get under Medicare is that you can choose your own doctor. You'll still have to join public hospital waiting lists, and generally, you get the same treatment as public patients.
If you want a higher level of hospital cover, look for Bronze, Silver or Gold hospital insurance.
Cheapest health insurance policies to save on tax
(Hot tip: Don't rely on them for health cover).
The cheapest hospital insurance in the Australian Capital Territory, New South Wales and Queensland is Phoenix Basic Accident Only with a $750 excess.
The cheapest hospital policy in Northern Territory and South Australia is HCF Accident Only Basic with a $750 excess.
The cheapest hospital policy in Tasmania, Victoria, and Western Australia is Frank Basic Accident Boost with a $750 excess.
What if I need a higher level of cover?
While the policies we share in this article are good for saving money on tax, we don't recommend you rely on them for cover. If you want health cover and you're looking for the best policy, you can use our tool to compare thousands of policies from 49 insurers.
You'll save money and get better cover with health insurance policies recommended by CHOICE. Unlike other insurance comparison websites, we don't get paid by any of the insurers we're comparing. CHOICE is nonprofit, so your membership fees help us fight for fair consumer rights, and empower you to get the best products.
How much do the cheapest Basic policies cost?
The government's private health insurance rebate, which is based on your income, affects how much you'll pay for a health insurance policy. If you live in Tasmania or Western Australia and earn over $97,000 as a single, or $194,000 for couples and families, buying the cheapest Basic Hospital policy will cost less than the MLS you'd have to pay if you don't take out hospital insurance. In the other states, it's not as clear cut. The rising costs of health insurance, means Australians in other states need to earn a little over the $97,000 rebate threshold before paying the MLS becomes cheaper than taking out a basic hospital policy.
We've compiled annual premiums for the cheapest policies in each state, and detailed when you'll save with a basic policy.
Phoenix Accident Only Basic
Annual premium in NSW & ACT by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$936 |
$886 |
$836 |
| $97,000–113,000 |
$1036 |
$986 |
$936 |
| $113,000–151,000 |
$1136 |
$1086 |
$1036 |
| >$151,000 |
$1236 |
$1236 |
$1236 |
The annual premium is after the private health insurance rebate has been applied, which varies by age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in NSW/ACT that will exempt you from having to pay the MLS is Phoenix's Accident Only Basic.
If you're under 65 and earn over $103,610 you'll be better off buying this policy than paying the MLS. For those aged 65–69 years earning over $98,604 per year, and those over 70 earning over $97,000, buying this accident-only policy will work out to be a better deal than the MLS.
Cover: Provides emergency ambulance cover and private hospital cover for the initial treatment after an accident if you go to emergency within 24 hours after an accident. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital.
Risks: No cover for other services.
Recommended for health cover? No.
HCF Accident Only Basic
Annual premium in Northern Territory by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$364 |
$345 |
$325 |
| $97,000–113,000 |
$403 |
$384 |
$364 |
| $113,000–151,000 |
$442 |
$423 |
$403 |
| >$151,000 |
$481 |
$481 |
$481 |
The annual premium is after the private health insurance rebate has been applied, which varies by age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in NT that exempts you from having to pay the MLS is HCF Accident Only Basic.
For anyone earning over $97,000 buying this accident-only policy will cost you less than paying the MLS.
Cover: Provides emergency ambulance cover and private hospital cover for
the initial treatment after an accident if you go to emergency within 24
hours after an accident. Covers rehab, psychiatric in-hospital treatment
and palliative care in a public hospital.
Risks: No cover for follow-up treatment after an accident and no cover for
other services.
Recommended for health cover? No.
Phoenix Basic Accident Only
Annual premium in Queensland by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$955 |
$903 |
$852 |
| $97,000–113,000 |
$1057 |
$1006 |
$955 |
| $113,000–151,000 |
$1159 |
$1108 |
$1057 |
| >$151,000 |
$1261 |
$1261 |
$1261 |
The annual premium is after the private health insurance rebate has been applied, which depends on age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in Queensland that exempts you from having to pay the MLS is Phoenix Accident Only Basic.
If you're under 65 and earn over $105,660 you'll be better off buying this policy than paying the MLS. For those aged 65–69 years earning over $100,555 per year, and those over 70 earning over $97,000 buying this accident-only policy will work out to be a better deal than paying the MLS.
Cover: Provides emergency ambulance cover and private hospital cover for the initial treatment after an accident if you go to emergency within 24 hours after an accident. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital. Emergency ambulance is covered by the Queensland government.
Risks: You have to serve public hospital waiting lists and may receive the same treatment as public patients.
Recommended for health cover? No.
HCF Accident Only Basic
Annual premium in South Australia by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$904 |
$855 |
$807 |
| $97,000–113,000 |
$1000 |
$952 |
$904 |
| $113,000–151,000 |
$1097 |
$1049 |
$1000 |
| >$151,000 |
$1194 |
$1194 |
$1194 |
The annual premium is after the private health insurance rebate has been applied, which varies by age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in SA that exempts you from having to pay the MLS is HCF Accident Only Basic.
If you're under 65 and earn over $100,040 you'll be better off buying this policy than paying the MLS. For those aged over 65 earning over $97,000 buying this accident only policy will work out to be a better deal than the MLS.
Cover: Provides emergency ambulance cover and private hospital cover for the initial treatment after an accident if you go to emergency within 24 hours after an accident. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital.
Risks: No cover for follow-up treatment after an accident and no cover for other services.
Recommended for health cover? No.
Frank Basic Accident Boost Hospital
Annual premium in Tasmania by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$954 |
$903 |
$852 |
| $97,000–113,000 |
$1055 |
$1005 |
$954 |
| $113,000–151,000 |
$1157 |
$1106 |
$1055 |
| >$151,000 |
$1259 |
$1259 |
$1259 |
The annual premium is after the private health insurance rebate has been applied, which vary by age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in Tasmania that exempts you from having to pay the MLS is Frank Basic Accident Boost.
If you're under 65 and earn over $105,550 you'll be better off buying this policy than paying the MLS. For those aged 65–69 years earning over $100,450 per year, and those over 70 earning over $97,000 buying this accident-only policy will work out to be a better deal than the MLS.
Cover: Provides private hospital cover for treatment within 90 days after an accident. You need to visit your doctor or go to emergency within 48 hours. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital. Private Emergency Attendance Benefit provides cover of 50% of the Emergency Department Attendance fee up to $200 per person, per year.
Emergency ambulance is covered by the Tasmanian government.
Risks: No cover for other services.
Recommended for health cover? No.
Frank Basic Accident Boost Hospital
Annual premium in Victoria by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$936 |
$886 |
$836 |
| $97,000–113,000 |
$1036 |
$986 |
$936 |
| $113,000–151,000 |
$1136 |
$1086 |
$1036 |
| >$151,000 |
$1236 |
$1236 |
$1236 |
The annual premium is after the private health insurance rebate has been applied, which varies by age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in Victoria that exempts you from having to pay the MLS is Frank Basic Accident Boost Hospital.
If you're under 65 and earn over $103,590 you'll be better off buying this policy than paying the MLS. For those aged 65–69 years earning over $98,585 per year, and those over 70 earning over $97,000 buying this accident only policy will work out to be a better deal than the MLS.
Cover: Provides private hospital cover for treatment within 90 days after an accident. You need to visit your doctor or go to emergency within 48 hours. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital. Private Emergency Attendance Benefit provides cover of 50% of the Emergency Department Attendance fee up to $200 per person, per year.
Risks: No cover for follow-up treatment after an accident and no cover for other services.
Recommended for health cover? No.
Frank Basic Accident Boost Hospital
Annual premium in Western Australia by income and age
| Income |
Under 65 years |
65–69 years |
Over 70 years |
| <$97,000 |
$726 |
$688 |
$649 |
| $97,000–113,000 |
$804 |
$765 |
$726 |
| $113,000–151,000 |
$882 |
$843 |
$804 |
| >$151,000 |
$959 |
$959 |
$959 |
The annual premium is after the private health insurance rebate has been applied, which varies by age. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
The cheapest policy in WA that exempts you from having to pay the MLS is Frank Basic Accident Boost Basic.
For anyone earning over $97,000 buying this accident only policy will cost you less than paying the MLS.
Cover: Provides private hospital cover for treatment within 90 days after an accident. You need to visit your doctor or go to emergency within 48 hours. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital.Private Emergency Attendance Benefit provides cover of 50% of the Emergency Department Attendance fee up to $200 per person, per year.
Risks: No cover for other services.
Recommended for health cover? No.
Financial incentives for health insurance
The government has come up with a few carrots (or are they sticks?) to encourage people to have private health cover, depending on your age and income. The incentives we've focussed on in this article are detailed below. The Lifetime Health Cover (LHC) loading can also make an impact.
Medicare Levy Surcharge
A 1% tax applies on your income in the 2025/26 financial year if you don't have hospital insurance and you earn more than $97,000 as a single (or $194,000 for couples and families). If you earn more than $113,000, you pay 1.25% and if you earn more than $151,000, you pay 1.5%. If you take out hospital insurance, you're exempt from the tax, and in many cases it's cheaper to pay for hospital insurance than to pay the tax.
Private health insurance rebate
You get a 24.3% rebate on your private health insurance premium in the 2024/25 financial year if you earn up to $97,000 a year as a single (or $194,000 for a couple or family). For singles earning above $97,000, the rebate steps down incrementally until it reaches 0% for people earning over $151,000 (or families or couples earning over $302,000). Often health funds deduct the rebate directly from the premium, otherwise claim it at tax time.
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