If you’re young and healthy, and not planning a family anytime soon, you may not need private health insurance at all. You’re already covered by Medicare in the public hospital system, so you have that peace of mind in case of an emergency.
But the main reasons to consider private health insurance in your 20s and 30s may have more to do with your finances than your health. Here’s the main reasons why you may be considering private health insurance at this age:
Your annual salary exceeds six figures
You have, or you’re about to, turn 31
You use medical services outside hospital like dental and physio (and you’re too adult to fit on your parents’ policy)
You’re thinking of starting a family
You have health needs that require elective surgery.
To help you make the best decision, we dive into each of these and share what you need to know before choosing private cover.
If you earn over $105,000 a year as a single person or $210,000 as a couple you’ll pay a higher Medicare Levy Surcharge if you don’t have hospital insurance.
Note the emphasis on hospital insurance. Extras cover for items outside hospital, like optical and dental, won’t save you money at tax time. If this sounds like you, try the Do I need health insurance quiz that will help you figure out if health insurance will save you money at tax time.
CHOICE Tip: Health insurance policies marketed to people in their 20s and 30s will often have little or no cover in hospital, and overpriced cover for items outside hospital like dental.
If you decide you really do need health insurance, then make sure it’s the right cover for you, and not just the policy that makes the insurer, or the comparison site the most money.
If you take out hospital cover after you’re 31, or if you have any long gaps between cover after that age, you’ll have to pay the Lifetime Health Cover loading on top of your health insurance premium.
How much will that be? Well, if you’re taking out hospital cover for the first time after you turn 31, you’ll pay an extra 2% on your premiums for every year you waited. For example, if you take out hospital insurance for the first time when you’re 50 years old, you’ll pay 40% more. The maximum LHC loading that can be applied is 70%. You’ll have to pay the loading for ten years.
But don’t worry too much about LHC. If you never get private health insurance, the LHC loading will never affect you. Plus, delaying health cover is usually a better deal financially, even if you do end up copping the LHC loading down the track
Keep in mind that getting extras cover (dental, optical, physio etc.) won’t help you avoid the LHC loading.
Many people buy health insurance just for the dental cover. But if you’re just seeing the dentist for regular checkups a couple of times a year and you’re not regularly using out of hospital services like physiotherapy and optometrists then health insurance will suck a lot more out of your bank account than it puts back.
Unlike hospital insurance, extras cover has no bearing on the Medicare Levy Surcharge or the Lifetime Health Cover loading, so it offers no tax benefits. On average, Australians receive $498 cash back per person from their health fund on extras policies (Australian Prudential Regulation Authority, September 2025). Many people pay more for extras cover than they receive in benefits, which means you might be better off downgrading or dropping it altogether.
Before renewing your extras cover, review the past year and see if you got back more from your fund than you paid.
Unless you’re getting a new pair of glasses every year, anticipating major dental work, or receiving regular treatments such as physiotherapy, you probably won’t use extras cover enough to warrant the outlay in cash. If you have difficulty budgeting, and you’d rather pay an insurer monthly than fork out hundreds of dollars in one hit for a large dentist bill, extras cover may be useful. But just be aware you could be paying more than you’ll ever get back.
If you want both hospital and extras cover, make sure you compare quotes for separate hospital and extras policies (even from different insurers) rather than just combined policies, as you may well save money.
Should you get health insurance if you’re planning a family?
You don’t need private health insurance to have a baby in Australia. But if you’re planning a family and want to have private health cover for birth-related services, you need to get Silver Plus hospital insurance that includes pregnancy cover, or a Gold policy, at least 12 months before giving birth to make sure you’ve served the 12-month waiting period before you can use the cover.
If you decide you do want private health cover for your baby from birth, it’s a good idea to upgrade sooner rather than later. If you and your partner already have cover, it probably won’t cost you any more to upgrade to a family policy – as kids in two-parent families are covered for free. If you’ll be a sole parent, unfortunately it will cost more to upgrade to a single-parent policy from a singles policy.
Is it cheaper to get a couples policy with your partner?
It’s not usually cheaper to take out a couples policy. Couples policies often just cost you double the price of a single policy, so it’s unlikely to save you any money.
In fact, having one shared policy with one provider might be convenient, but it could mean you’re missing out on savings.
You may have different health insurance needs to your partner (for example, perhaps you need a more expensive policy that covers major dental such as bridges and crowns, whereas your partner could take out a cheaper policy as they only use dental check-ups, physio and massages), which means it may be cheaper for you to opt for two separate singles policies with different levels of cover.
Private hospital insurance comes into its own when you require elective surgery. With private hospital insurance, you can skip the waiting list, get a bed in a private hospital and choose the doctor who will perform your surgery. All of this can make a hospital stay far more welcome.
However, it does come at a cost, and that’s not just the cost of the health insurance premiums. You will have to pay the policy excess, usually $250 to $750 upfront to the hospital. You will also often have to pay anaesthetist fees, and if your chosen doctor doesn’t have a gap cover agreement with your health fund (which is often the case), then you’ll have to cover the gap in your doctors fees that your health fund doesn’t pay.
You don’t pay the policy excess, doctor fees, or anaesthetist costs if you have your procedure done in a public hospital under Medicare. There are definitely benefits to private hospital insurance, but you’re essentially paying a premium for the right to pay more money when you get to hospital.
Jane Bardell is a Content producer in the Insurance and utilities team. She writes about home, car, pet and health insurance.
Previously at CHOICE, she checked facts, figures and statistics as a Verifier with the Editorial and investigations team.
Jane has a Bachelor of Science from the University of New South Wales. LinkedIn
Jane Bardell is a Content producer in the Insurance and utilities team. She writes about home, car, pet and health insurance.
Previously at CHOICE, she checked facts, figures and statistics as a Verifier with the Editorial and investigations team.
Jane has a Bachelor of Science from the University of New South Wales. LinkedIn
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