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Private health insurance premiums rose by an average of 3.73% on 1 April 2025 — the largest increase since 2018. Australians could pay an additional $3.73 for every $100 of premiums they already pay, depending on their health fund. Federal Health Minister Mark Butler initially rejected private health insurers' proposed increases of 5%-6% twice before agreeing to a 3.73% rise — a compromise between industry demands and what the government would allow. The premium hike aligns with market expectations, given cost-of-living pressures. But, that doesn’t make it any easier to swallow for Aussies who now have little time to adjust their budgets or review and switch policies.
Medibank
3.99%
Bupa
5.10%
HCF
4.95%
nib
5.79%
HBF
2.80%
Australian Unity
4.89%
2025 is proving to be a tough year for policyholders, with rising healthcare costs driving premiums up.
Chris Whitelaw, General Manager of Health Insurance at Money.com.au, highlighted the issues facing the industry in 2025. "We’ve carried out extensive research among consumers and are speaking to health insurance customers everyday. The overall trend in 2025 is that customers feel they are paying too much and are not clear on what they are getting in return.
Chris explained that cost is still the biggest barrier for Australians without private health insurance.
"Our research shows that 80% of Australians believe premiums are simply too expensive, while more than half of respondents said they are not clear on what is covered in each of the hospital cover tiers. This leads to frustration when people need to make claims or reassess their coverage."
“On a more positive note, 72% of policyholders say their health insurance coverage provides peace of mind.”
Here are some of the main benefits of private health insurance in Australia.
Having private health insurance means you may receive treatment faster than you would through the private system. Public waiting lists on certain treatments can be very long and private health insurance can mean being seen sooner.
If you have private health insurance you may be able to choose where to be treated and by which doctor. You also have a lot of choice when it comes to tailoring you cover to suit you needs, particularly on Extras cover.
Depending on your income, if you don’t have an adequate level of Hospital cover you won’t need to pay the Medicare Levy Surcharge. There are also government incentives designed to encourage people to take out private health cover when they are younger.
Depending on your income level, you may receive a rebate from the government to lower the cost of your private health insurance. This will either come in the form of a discount on your premiums or as a tax offset.
| Private health insurance | Medicare |
|---|---|
Your choice of doctor when you go to hospital | Covers hospital treatments but you can't choose your doctor |
Covers certain out-of-hospital services, like dental, through Extras cover | Does not cover out-of-hospital services, like dental |
Some policies cover ambulance services | Ambulance services not covered (but are paid by for the government in some states and territories) |
May mean you avoid the Medicare Levy Surcharge | You may need to pay the Medicare Levy Surcharge to help fund the system |
Private health insurance in Australia allows people who are covered to be treated as a private patient in hospital, with some or all of the cost covered by their insurance. This may mean not needing to wait as long for a procedure. As a private patient, you also generally have more control over what hospital you’re treated at and by which doctor.
Health insurance also covers some things that are not covered by the public health system in Australia, such as dental check ups and procedures. But what exactly you get from health insurance will depend on the type of policy you have.
Hospital cover provides a benefit if you are treated as a private patient in hospital. It covers a range of medical conditions, which depend on what tier cover you have, including treatment costs and additional costs like travel and accommodation relating to covered procedures.
Generally, a Hospital policy will only cover a portion of the cost of receiving treatment, with the difference (known as a gap payment) to be covered by the patient out of pocket.
There are four tiers of Hospital cover in Australia, with varying levels of inclusions and cost:
An extras policy covers a range of medical and related treatments that occur outside of hospital. Some of the more common Extras inclusions are dental check ups and treatments, optical, physiotherapy, and certain pregnancy related services.
Like hospital cover, the types of conditions covered under an Extras policy will depend on what level of policy you choose. Policies also vary in terms of the limits for claiming under different categories per year and what percentage of an individual treatment you can claim back.
The higher the level of Extras coverage you choose, the more expensive the policy is likely to be.
You can choose to take out private health insurance that’s a combination of Hospital and Extras, although effectively you will have two separate policies. You generally have the ability to ‘mix and match’ your Hospital and Extras based on your needs. For example, you might choose to have a high level of Hospital cover and a low level of Extras, or vice versa.
Most people who get Hospital cover choose to do so through a combined policy. It's more common for people to have an Extras-only policy, the latest health insurance statistics show.
Depending on where you live in Australia, you may be charged for using ambulance services. Ambulance insurance is designed to cover policyholders for all or part of these costs. Ambulance cover can be purchased as part of a wider health insurance policy or as a standalone.
This type of cover is designed for people who will be living in Australia under certain Visa classes, but who will not be eligible to access the Medicare system. Overseas visitors health cover works differently to private health insurance for permanent residents and citizens. For example, pre-existing conditions may not be covered.
Whatever the make-up of your family, there is a policy type to fit. The types of treatments and services that can be covered are the same for each. The only difference is the number and ages of people who can be covered by each:
We recently surveyed over 1,000 Australians and found that 51% use their Hospital cover 1-2 times a year, 10% use it 3-5 times a year, 5% use it 6-10 times a year, and 2% use it more than 10 times a year. Our survey also revealed that 69% of respondents find the health insurance tier system (Basic, Bronze, Silver, Gold) somewhat confusing, particularly regarding what each tier covers and how it impacts costs.
| Health fund | Member retention (hospital cover) |
|---|---|
Onemedifund | 93.4% |
ACA Health Benefits Fund | 92.7% |
Defence Health | 92.0% |
Teachers Health | 91.9% |
CBHS Corporate | 91.4% |
| Health fund | Benefits as % of contributions |
|---|---|
Police Health | 93.9% |
Teachers Health | 89.0% |
HCF | 89.0% |
AIA Health | 88.0% |
CBHS Corporate | 87.1% |
Health insurance policies usually have waiting periods, which is the time you must wait before you can claim on certain services. These can range from two months for basic hospital treatment to 12 months for pre-existing conditions or pregnancy-related services. However, there are some scenarios where you may be able to get health insurance with no waiting period.
Even with private health insurance, you might still have out-of-pocket costs, also known as ‘the gap’. This happens when the doctor’s or hospital’s fees are higher than what Medicare and your health fund will pay. How much the gap payment will be depends on the type of treatment, which hospital you visit and other factors.
An excess is the amount health insurance policyholders need to pay upfront when admitted to hospital, as a contribution towards the cost of treatment. You may be able to opt for a higher excess to lower your health insurance premiums.
This is a government initiative encouraging Australians to take out private hospital cover before they turn 31. If you join after that age, you'll pay an extra 2% on your premium for every year you're over 30, up to a maximum of 70%.
Higher-income earners who do not have private hospital cover may need to pay the Medicare Levy Surcharge. This is an additional tax designed to encourage people to take out private insurance and reduce pressure on the public health system.
In Australia, health insurance premiums are not determined by your health status or risk. Under community rating, everyone pays the same premium for the same policy, regardless of age (including seniors), gender, or health conditions. This is different to other kinds of cover (like car insurance) where insurers can take account of factors like the policyholders age and past claims.
Switching health insurers is a very simple process, so don’t be afraid to regularly review what you’re paying and change if you can find better value elsewhere. Comparing health insurance once at least once a year is a good way to ensure you’re not overpaying.
When you’re comparing providers, look out for health insurance offers and discounts. Some providers offer 6 or eight weeks free on new eligible policies, which can be equal to hundreds of dollars in saved premiums.
There are various incentives (and penalties) in place to encourage people to take out health insurance while they are young. For example, if you have not taken out hospital cover from the year you turn 31, but then decide to take it out later on, you will pay a 2% loading on top of your premium for every year you are aged over 30.
Health insurers typically increase their premiums once a year on 1 April. However, it may be possible to pre-pay your premiums for the remainder of the year at the current level. This would mean avoiding the premium increase for that year. Just be sure you won’t need to cancel your policy after you have forked out for the premiums in advance.
Health insurance policies are sold in tiers to reflect the level of coverage available under the policy. Take a look at what’s covered under each tier and match your level of cover to what you actually need (or are likely to need in the future). Consider reducing your cover level if you are overpaying for cover you don’t need.
On Hospital cover, you may be able to choose a higher level of excess on your policy. This will mean a higher up-front cost if you are admitted to hospital and make a claim, but your premiums should be lower.
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Private health insurance in Australia provides coverage for health services beyond what Medicare offers. It includes Hospital cover for in-hospital treatments and Extras cover for services like dental, optical and physiotherapy.
A recent Money.com.au survey found that 54% of Australians have Hospital cover, while 51% have Extras cover.
Yes, you can switch health insurance providers at any time. Just be sure to check whether any waiting periods apply to your new policy. The switching process is usually quick and hassle-free. Once you sign up with a new fund, your cove can often start immediately or from a date you choose, including the day after you cancel your old policy.
If you’ve paid premiums in advance, your previous fund is generally required to refund any amount paid beyond your cancellation date.
To switch health insurance in Australia you simply need to apply for cover through a new fund. Your new fund will ask for your policy details relating to your old fund and will take care of the rest.
When switching funds just make sure you are not going to be losing any coverage you might rely on in the future. Also bear in mind that if you apply for a higher level of cover, you will generally need to sit a waiting period on the new policy. During that period you will not be able to make a claim.
According to our latest survey, 9% of Australians plan to switch their health insurance policy in 2025.
Health insurance in Australia can be expensive. Based on our analysis, the cost of combined Hospital and Extras cover typically ranges from $95 to $360 per month for singles, and $190 to $750 per month for couples and families.
But just how expensive it is will depend on various factors, including:
Whether health insurance is worth it or not comes down to your own situation. For example, the value you get from having it could be determined by your medical situation and needs, your income and how old you are.
Younger people typically do not claim on their health insurance as often as older people, but there may be discounts available to younger policyholders to incentivise them having cover in place.
The best health insurance policy will be different depending on what type of cover you need. Hospital policies are broken up into tiers based on the level of cover, while Extras policies are also categorised by the level of inclusions. Choosing the best policy for your needs means matching the inclusions to your current and likely future needs.
Once you’ve decided what level of cover is best for you, you should compare multiple providers based on factors like premium cost and coverage limits before deciding which to go with.
Start by assessing your health needs, budget, and the level of cover you require – whether it’s just for you, your partner, or your entire family. The best way to find the right health insurance policy is to compare plans from multiple providers, as many funds regularly offer sign-up deals and incentives to attract new members.
No, private health insurance is not mandatory in Australia. But there are several government incentives and policies in place that encourage people to have it.
Most forms of insurance are optional for consumers. The only form of mandatory insurance most individuals will encounter is compulsory third party car insurance (CTP). You generally must have this if you own a car.
We have a range of health insurance partners including:
Please note, we do not compare all health funds in the market, or all policies from our partner funds, and at times certain funds or products might be unavailable.
In Australia, private health insurance operates on a community rating system. This means that everyone pays the same premium for the same policy, regardless of their health status or claims history.
The MLS is an additional tax for Australian taxpayers who don't have private Hospital cover and earn above a certain income threshold. It's designed to encourage higher-income earners to take out private health insurance.
A recent Money.com.au survey asked Australians why they chose to take out Hospital cover. The top reason was to avoid the Medicare Levy Surcharge, with 24% of respondents citing it as their main motivation.
For the 2024–25 financial year, the Medicare Levy Surcharge (MLS) applies to Australian taxpayers without appropriate private hospital cover whose income exceeds certain thresholds. The MLS is an additional tax of 1% to 1.5%, depending on income level.
Here are the income thresholds for the MLS:
For families, the income threshold increases by $1,500 for each dependent child after the first.
The main difference between Bronze and Gold hospital insurance tiers in Australia is the level of cover provided and the price.
Gold policies offer the highest level of cover, including all 38 clinical categories (like pregnancy, joint replacements and cataracts), while Bronze policies cover a basic set of inclusions (like emergency ambulance and accidents).
Bronze is cheaper but more limited, while Gold is more expensive but covers a broader range of services and is ideal for people who want or need full private hospital coverage.
The cost difference between Basic and Gold policies is significant, reflecting the level of coverage each tier provides. For example, a Basic policy for singles can start from around $80 per month, while a Gold policy may cost $250 or more each month.
Some Basic hospital plans include ambulance services, but coverage varies by provider and policy. Some Basic policies offer emergency ambulance cover, while others do not. It's worth checking the specific details of your policy to determine if ambulance services are included.
Ambulance cover also depends on your state or territory. In Queensland and Tasmania, residents are covered by government-funded ambulance services. In other states and territories, you'll typically need separate ambulance cover through your health insurance.
The rebate is an income-tested rebate from the government to help cover the cost of private health insurance premiums. The percentage of the rebate varies based on your income and age.
The Australian Government provides a private health insurance rebate to help reduce the cost of premiums for eligible individuals and families. The rebate amount varies based on your income, age and family status. With this particular rebate, you can save between 8.095% and 32.385%.
The private health insurance rebate tiers for premiums paid from 1 April 2025 to 30 June 2025 are:
| Single income | Rebate % |
|---|---|
| $97,000 or less | 24.288% for under 65s 28.337% for ages 65-69 32.385% for ages 70+ |
| $97,001 - $113,000 | 16.192% for under 65s 20.240% for ages 65-69 24.288% for ages 70+ |
| $113,001 - $151,000 | 8.095% for under 65s 12.143% for ages 65-69 16.192% for ages 70+ |
| $151,001+ | Not eligible |
| **Family income** | **Rebate %** |
| $194,000 or less | 24.288% for under 65s 28.337% for ages 65-69 32.385% for ages 70+ |
| $194,001 - $226,000 | 16.192% for under 65s 20.240% for ages 65-69 24.288% for ages 70+ |
| $226,001 - $302,000 | 8.095% for under 65s 12.143% for ages 65-69 16.192% for ages 70+ |
| $302,001+ | Not eligible |
LHC loading is a government initiative to encourage individuals to take out private hospital cover earlier in life. If you don't have hospital cover by July 1 following your 31st birthday, you may pay a 2% loading on top of your premium for every year you are aged over 30.
6% of Australians chose to take out Hospital cover to avoid paying the Lifetime Health Cover loading, according to a recent Money.com.au survey.
No, Australian health insurers are not permitted to offer no-claim discounts on health insurance policies. According to Peoplecare, private health insurance legislation prohibits health funds from providing no-claim bonuses.
A Money.com.au survey found that 31% of Australians have never made a claim on their hospital cover, compared to just 8% who have never claimed on their extras cover.
Private health insurance can help cover various aspects of managing chronic conditions, including specialist consultations, hospital admissions for related surgeries, and access to allied health services. However, you'll likely need to be on a Gold-tier policy. Coverage details may vary depending on your insurer, so it’s important to check the specifics of your policy.
Insurer GMHBA offers a Chronic Disease Management Program (CDMP), providing eligible hospital cover members with phone-based health coaching, personalised advice, and support for pain management and improving overall health.
Please note that if you have a chronic condition before joining a private health fund, it may be considered a pre-existing condition, and some policies may have waiting periods or exclusions for treatment related to that condition.
Yes, having private health insurance does not affect your eligibility for Medicare and you can still access public healthcare services. According to Services Australia, you may go to a public hospital as a private patient and be able to claim the costs from Medicare and some or all of the costs through your private health cover.
Waiting periods are the timeframes you need to wait after taking out a policy before you can start claiming benefits. For Hospital cover, common waiting periods include 12 months for pre-existing conditions and pregnancy-related services. With Extras cover, you’ll typically see 2-month waits for general dental and 6 months for optical services.
An excess is a predetermined amount you agree to pay when you are admitted to the hospital. For example, if your excess is $500, you pay this amount towards your hospital stay, and the insurer covers the rest. A co-payment is an agreed amount you pay each time you receive a particular service, such as $50 per day in the hospital.
If you earn above a specified income threshold and don't have private hospital cover, you may be required to pay the Medicare Levy Surcharge, an additional tax.
Select the offer you're interested in to view full T&Cs.
The information on this page is general in nature and has been prepared without considering your objectives, financial situation or needs. You should consider whether the information provided and the nature of any product is suitable for you and seek independent advice if necessary.
We do not compare all health insurance providers and products available in Australia and we do not guarantee that our product comparisons include all product features and attributes relevant to you.
In providing general information on this page, we are not providing you with a recommendation or suggestion about a particular product. You should read the relevant disclosure statements or other offer documents before deciding whether to apply for or continue to use a particular product.
However, when a customer requests that we contact them regarding health insurance, after being on the Money.com.au website, we will take the information they provide into account when providing the customer with a range of health insurance product options.
We have partnered with The ItsMy Group (ABN 85 167 289 965) to form our panel of health insurance providers. If a Money.com.au insurance advisor helps you find a more suitable product and you join that health insurer, IMG receive a payment from that fund, which they pass on to us. This is normally a one-off fee but it can also be paid in increments over time.
There is no charge to consumers to use the service, and any payment we receive does not change the price you pay for the product. Our health insurance advisors do not know how much we are paid by the fund they recommend.
Both Money.com.au and The ItsMy Group are members of the Private Health Insurance Intermediaries Association (“PHIIA”) and are have signed up to the PHIIA Code of Conduct.
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Our customers have access to offers from a range of health insurance partners:
Please note, we do not compare all health funds in the market, or all policies from our partner funds, and at times certain funds or products might be unavailable.
At Money.com.au, we aim to provide you with the highest level of service, but we also understand that occasionally you may not be 100% happy with us. If that’s the case, you can let us know by emailing us at support@money.com.au
If we can’t resolve your issue immediately, a senior manager will respond to you at the latest by the next business day from receipt of your enquiry. If we are still unable to resolve the matter within three days, it will be escalated to the attention of the CEO.
You could also contact your health fund or the Private Health Insurance Ombudsman’s office (PHIO):
Our Australian-based call centre is open weekdays between 9am and 5pm (AEST) with our team of experts ready to help!
You can reach us on 1300 001 359 or (02) 8528 1995.
