Private health insurance reforms FAQs

Everything you need to know about the changes to private health insurance.

Confused about the changes to private health insurance that came into effect on 1 April? You’re not alone. We’ve been fielding lots of questions from confused readers. We’ve put the answers all in one place so you can find out what you need to know quickly.

It depends. In Australia, we're lucky to have free access to world-class public hospitals.

The reasons you might want private hospital insurance are:

  • Quick access to surgery for a so-called ‘elective’ procedure such as cataract eye surgery or a knee replacement.
  • To be able to use private hospitals which can be more comfortable.
  • To be able to choose your own doctor.
  • To avoid extra tax and surcharges. (To find out whether health insurance can save you money at tax time, take our quick quiz at

If you already have health insurance, read our advice on what to do about the letter from your health fund. Here's what to do if you want to switch insurers

If you don’t have health insurance, take our quiz to find out whether you even need it: If you do, you can find out what level of cover is right for you by taking our Should you choose Gold, Silver or Bronze? quiz.

Hospital cover is categorised into four policy tiers: Gold, Silver, Bronze and Basic.

All hospital-based treatments have been organised into 38 categories, based around different body systems (like 'Ear, nose and throat' and 'Bone, joint and muscle').

Each policy tier will cover a specific number of treatment categories in a private hospital:

  • Gold: All 38 categories of services.
  • Silver: 26 categories of services.
  • Bronze: 18 categories of services
  • Basic policies will provide very little – if any – cover in a private hospital.

Policies that cover more than the minimum requirement can be called a 'Plus' policy: Basic Plus, Bronze Plus or Silver Plus.

Need help deciding which is the right level of hospital cover for you? Take our quiz Should you choose Gold, Silver, or Bronze?.

CHOICE! We’ve been busy analysing the best hospital policies over the last couple of months, see our recommended policies for Gold, Silver and Bronze tiers, and which is the cheapest Basic hospital cover to help you avoid tax.

Private health insurance costs have increased by 3.25% on average, although some funds have average increases as high as 5.9%.

"While this is the lowest change in nearly two decades, premiums have increased by 66% in the last decade, while CPI has grown only 22%," says Uta Mihm, CHOICE's health insurance expert.

We project that the average cost of a single-person top hospital policy will increase from $2542 to about $2625 before the rebate is applied. (But rebates are decreasing too: find out more here.)

Think dollars, not percentages

While the percentage increases can be confronting, it's important to focus on costs, not just percentages. Even if your premium has increased by more than the average, don't panic: compare it with other funds and policies. If it was cheap before, you may find that it's still reasonably priced, even if it has increased by a larger percentage.

"A higher percentage increase off a low base can be good when compared to a smaller increase off a much higher base," CHOICE Community member Phil says.

State-based pricing

The state you live in could also impact how much your premiums increase.

Health costs are more expensive in NSW, Victoria, Queensland and the ACT, and premiums are usually higher in those states.

Some smaller funds have had the same pricing across the country, instead of state-based pricing, which bigger funds tended to do. Smaller funds may increase their premiums in states where medical costs are higher, so if you're with one of those funds this could be one of the reasons for your premium increase.

Here's what the different tiers of cover include:

Basic policies

  • No cover for cancer
  • Includes rehabilitation and in-hospital palliative care but only in a public hospital

Bronze policies

  • Covers breast, skin and prostate cancer
  • Covers chemotherapy and radiation
  • Includes rehabilitation and palliative care, but only in a public hospital
  • Covers endoscopy and colonoscopy

Silver policies

Everything covered by Basic and Bronze policies, as well as:

  • Lung cancer surgery
  • Medically necessary plastic and reconstructive surgery
  • Bone marrow transplants
  • Back, neck and spine surgery
  • Does include rehabilitation and palliative care, but only in a public hospital

Gold policies

Everything covered by Basic, Bronze and Silver policies, as well as:

  • Pain management with a device (for example, a surgically implanted device to manage pain caused by heart disease)
  • Rehabilitation and palliative care

To find out which tier is best for you, check out our quiz Should you choose Gold, Silver or Bronze?.

Higher excesses than previously available (up to $750 per person and $1500 per couple/family) are an option on some policies under the new reforms. Choosing a higher excess will reduce your premium and could potentially save you more than prepaying.

An excess is a contribution towards each hospital stay that you can opt to pay to reduce your premiums. So a new or increased excess could mean a smaller premium increase or even a decrease in your premium.

"Before agreeing to a higher excess, consider whether you expect to have to go to hospital over the next two years. For example, do you have surgery coming up or are you planning a family? Also, will you be able to afford paying a higher excess, in addition to other out-of-pocket costs that usually come up with a hospital stay?" says Uta Mihm, CHOICE's health insurance expert.

Should you accept a new or increased excess?

  • If you're not likely to go to hospital in the next year (i.e. you have no current health problems) and therefore you're not likely to have to pay the excess, stay on your policy to take advantage of the reduced premium.
  • If you think you'll go to hospital in the next year (e.g. you're planning to get pregnant or think you'll need surgery soon) switch to a policy with a lower excess.

This may depend on how far along you already are. If you already have your stay in hospital booked it's likely you'll still be covered. But you may want to upgrade your policy to a family policy to make sure your baby is covered. Call or email your insurer to confirm.

If you don’t already have private health insurance, read our article on health insurance for pregnancy and birth.  

If you're currently having treatment or have surgery booked, the changes may not affect you for at least three to six months. Call or email your insurer to confirm.

The four cover tiers may have made it more difficult to pick and choose services as you need them. Previously, you may have been able to remove cover for pregnancy and IVF if you didn't need them, but under the new system, pregnancy and IVF are only covered by Gold and some Silver Plus policies.

"A good idea might be to look for Silver Plus policies that cover some Gold services such as cataract eye surgery but do not cover pregnancy and IVF," says Uta Mihm, CHOICE's health insurance expert.

"However, a Silver Plus policy may not cover hip or knee replacements. These surgeries are very expensive for health funds."

So even if you find a Silver Plus policy that covers joint replacements, you need to make sure it's actually cheaper than the cheapest Gold policy, otherwise you might be paying more for less cover.

A trip to hospital in an ambulance can easily cost around $1000 depending on how far away you are from the nearest hospital.

If it’s just ambulance cover you’re concerned about, you may find you’re already covered by your state government, or that a state subscription service might offer better value.

An ambulance-only health policy is cheaper than hospital insurance, but beware: these policies cover you purely for ambulance, there’s no hospital or extras cover included, and they don’t help you avoid the Lifetime Health Cover loading or the Medicare Levy Surcharge.

For more information about ambulance cover, check out our article on whether you need accident or ambulance insurance.

You may be able to. Some funds may offer a discount of 2% on your premium for every year you're under 30, up to a maximum of 10% for people aged 18 to 25.

Your age  Maximum discount
29  2%
28 4% 
27 6%
26  8%
18 to 25  10%

Our insurance experts are here to help you navigate the confusion with unbiased, expert advice: More advice on health insurance.