How does private Hospital cover work?

Private Hospital cover helps pay for your treatment and accommodation when admitted to a hospital. You choose your policy based on the level of cover you want. When you need hospital care, your insurer covers agreed costs after any excess or co-payments, giving you more choice and potentially faster access than public care.

Is Hospital cover mandatory in Australia?

No, Hospital cover is not mandatory in Australia. However, higher-income earners without private Hospital cover may pay the Medicare Levy Surcharge as a financial penalty. While not compulsory, many Australians take out cover to avoid this surcharge and benefit from greater choice and reduced wait times.

Do I need Hospital cover if I have Medicare?

Medicare covers hospital treatments in public hospitals but does not cover private hospital costs or allow you to choose your doctor. Hospital cover provides additional benefits like private hospital access, choice of specialists and potentially shorter wait times for elective surgeries.

What does Hospital cover include?

Hospital cover generally pays for your accommodation, theatre fees, specialist consultations, diagnostic tests, and sometimes rehabilitation or psychiatric care. Coverage details vary between policies, so it’s important to check what’s included and whether any treatments are excluded or have waiting periods.

How much does Hospital cover cost?

Premiums for Hospital cover vary depending on factors like your age, location, insurer and level of cover chosen. For singles, monthly premiums typically range from around $85 to $335, while families can expect higher costs. Premiums also usually increase annually, commonly in April.

What is the Medicare Levy Surcharge?

The Medicare Levy Surcharge (MLS) is an additional tax on Australian taxpayers earning above a certain income threshold who don’t have appropriate private Hospital cover. It ranges from 1% to 1.5% of income and aims to encourage people to take out private insurance, reducing pressure on the public system.

What is the Lifetime Health Cover loading?

Lifetime Health Cover (LHC) loading is a penalty added to your private Hospital cover premiums if you delay taking out cover after turning 31. It adds 2% to your premium for each year you wait, up to a maximum of 70%, incentivising early uptake of private insurance.

Can I get a rebate on my private Hospital cover?

Yes, the Australian Government provides a Private Health Insurance Rebate that subsidises Hospital premiums based on your age and income. The rebate can reduce your premium cost significantly, and you can choose to receive it as a direct discount or claim it as a tax refund.

Can I choose my hospital and doctor with Hospital cover?

In most cases, private Hospital cover lets you select your preferred hospital and specialist, giving you more control over your care. However, your choices may be limited by doctor availability, hospital agreements and the specifics of your policy.

Does Hospital cover pay for ambulance services?

Ambulance services are generally not included in private Hospital cover and often require separate ambulance insurance under an Extras policy. However, residents of Queensland and Tasmania are automatically covered by their state governments.

What is an excess or co-payment?

An excess is a fixed amount you pay upfront either per hospital admission or per policy year before your insurer covers the rest. A co-payment is a daily fee charged for each day you stay in hospital. Choosing higher excess or co-payments can reduce your premiums but increases your out-of-pocket costs when admitted.

Are pre-existing conditions covered?

Pre-existing conditions usually have a waiting period, often 12 months, before you can claim treatment related to them. Insurers assess your medical history when you apply, and the waiting period is designed to prevent people from joining only when they need immediate treatment.

Can I switch Hospital policies without penalty?

Yes, you can switch Hospital policies at any time. If you’ve already served the waiting periods with your previous fund, you won’t have to re-sit them, unless you’re switching to a higher level of cover. It’s important to compare the new policy carefully and understand if you’ll lose any benefits or face new waiting periods.

Does Hospital cover cover pregnancy and birth?

Yes, Hospital cover can include pregnancy and birth services, but this is typically only available under Gold-tier policies. A 12-month waiting period usually applies, meaning you’ll need to have held your Gold cover for at least 12 months before you can claim benefits for maternity-related hospital services.

Can children be covered on my Hospital policy?

Yes. Family and single-parent Hospital cover policies include dependants, generally up to age 31 (though, some conditions may apply). This ensures your children have access to private hospital care if needed.

Is Hospital cover tax deductible?

No, Hospital cover is not tax deductible in Australia. However, having an eligible private Hospital policy can help reduce or avoid certain tax liabilities, such as the Medicare Levy Surcharge (MLS) and the Lifetime Health Cover (LHC) loading.

What happens if I don’t have Hospital cover and I earn above the threshold?

If your income exceeds the Medicare Levy Surcharge threshold and you don’t have private Hospital cover, you’ll be required to pay the surcharge – an additional tax of up to 1.5% of your income, designed to encourage private insurance uptake.

How do I make a claim on my Hospital cover?

Most claims are processed directly between your health insurer and the hospital, so you may not need to pay upfront. For out-of-pocket expenses, you submit invoices or receipts to your insurer for reimbursement, either online, by phone or through an app.

Does Hospital cover allow me to be treated as a private patient in a public hospital?

Yes, with Hospital cover, you can elect to be treated as a private patient in a public hospital, which may allow choice of doctor and private rooms, depending on availability. This option varies by state and hospital policy.

Compare Hospital Cover Health Insurance in Australia

What is Hospital cover?

Hospital-only cover is a private health insurance policy that helps pay for treatment and accommodation when you’re admitted as a private patient in a public or private hospital. Depending on your level of cover, it typically pays benefits towards costs like hospital stays, surgery, theatre fees and doctors’ charges.

One of the key advantages of Hospital cover is that it gives you more choice when it comes to your doctor or specialist, and it can help you avoid public hospital waiting lists by allowing treatment in a private facility. There are also tax benefits and rebates for taking out an appropriate level of cover.

According to our health insurance analysis, around 12.3 million Australians have some form of Hospital cover, either as a standalone product or as a combined Hospital and Extras policy. This includes cover held under singles, couples, family and single parent policies.

Hospital cover tiers explained

Hospital cover in Australia is divided into four tiers, each offering different levels of inclusions and price points:

Basic

Offers minimal coverage and is designed mainly to provide access to private hospital treatment for a limited number of services. Basic policies usually include restricted cover for certain procedures and are often chosen to avoid the Medicare Levy Surcharge (MLS) or Lifetime Health Cover (LHC) loading, rather than for comprehensive protection (we’ll speak more to this below).

Bronze

The next level of Hospital cover is Bronze, which includes a wider range of treatments than Basic cover. It typically covers services such as joint reconstructions, hernia and appendix procedures and gastrointestinal endoscopies. It generally excludes treatments like pregnancy, heart-related procedures and joint replacements. Bronze policies might be a good option if you’re after more than minimal cover but want to avoid the higher premiums of Silver or Gold tiers.

Silver

Silver builds on Bronze and generally includes heart and vascular procedures, blood disorders, major dental surgery and the implantation of hearing devices. According to the latest report from the Private Health Insurance Intermediaries Association (PHIIA), Silver is the most popular Hospital tier among Australians switching funds. It’s especially popular with seniors, with more than 70% of Aussies over 60 choosing Silver or Silver Plus Hospital cover.

Gold

Gold health insurance is the highest level of private Hospital cover available in Australia, offering the broadest coverage and the most extensive benefits. It includes all 38 clinical categories listed on PrivateHealth.gov.au, covering treatments like rehabilitation, palliative care, cataracts, joint replacements, pregnancy and birth, and more. Despite being the top tier in Hospital cover, Gold policies only account for 3.5% of total sales, likely due to its higher cost.

The Basic, Bronze, Silver and Gold tier system was introduced in 2019 to make it easier for Australians to compare Hospital cover. But recent research from Money.com.au paints a different picture – only 31% of Australians say they easily understand the tier system. Meanwhile, 56% say they somewhat understand it, and 13% find it just as confusing as the old insurer-specific policies.

What are you covered for with Hospital-only health insurance?

Hospital-only health insurance covers you for treatment as a private patient in a public or private hospital. It typically includes hospital accommodation, theatre fees, and a portion of the doctor and specialist fees while you’re admitted.

The exact treatments you're covered for depend on your policy tier – Basic, Bronze, Silver or Gold – each of which includes specific clinical categories as outlined by the Australian Government. Again, you may be able to add certain treatments from higher tiers provided the fund allows it.

Hospital cover also helps you avoid or reduce the Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) loading, and may offer shorter wait times for elective surgery.

While it doesn’t cover out-of-hospital services like dental, physio or optical (those are included under Extras cover), Hospital cover is designed to give you more choice, control and peace of mind around when and where you receive treatment.

Clinical category	Rehabilitation
Basic	R
Bronze	R
Silver	R
Gold	Y
Clinical category	Hospital psychiatric services
Basic	R
Bronze	R
Silver	R
Gold	Y
Clinical category	Palliative care
Basic	R
Bronze	R
Silver	R
Gold	Y
Clinical category	Brain and nervous system
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Eye (not cataracts)
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Ear, nose and throat
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Tonsils, adenoids and grommets
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Bone, joint and muscle
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Joint reconstructions
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Kidney and bladder
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Male reproductive system
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Digestive system
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Hernia and appendix
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Gastrointestinal endoscopy
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Gynaecology
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Miscarriage and termination of pregnancy
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Chemotherapy, radiotherapy and immunotherapy for cancer
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Pain management
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Skin
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Breast surgery (medically necessary)
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Diabetes management (excluding insulin pumps)
Basic	O (R)
Bronze	Y
Silver	Y
Gold	Y
Clinical category	Heart and vascular system
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Lung and chest
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Blood
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Back, neck and spine
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Plastic and reconstructive surgery (medically necessary)
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Dental surgery
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Podiatric surgery (provided by a registered podiatric surgeon)
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Implantation of hearing devices
Basic	O (R)
Bronze	O
Silver	Y
Gold	Y
Clinical category	Cataracts
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Joint replacements
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Dialysis for chronic kidney failure
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Pregnancy and birth
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Assisted reproductive services
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Weight loss surgery
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Insulin pumps
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Pain management with device
Basic	O (R)
Bronze	O
Silver	O
Gold	Y
Clinical category	Sleep studies
Basic	O (R)
Bronze	O
Silver	O
Gold	Y

Clinical category	Basic	Bronze	Silver	Gold
Rehabilitation	R	R	R	Y
Hospital psychiatric services	R	R	R	Y
Palliative care	R	R	R	Y
Brain and nervous system	O (R)	Y	Y	Y
Eye (not cataracts)	O (R)	Y	Y	Y
Ear, nose and throat	O (R)	Y	Y	Y
Tonsils, adenoids and grommets	O (R)	Y	Y	Y
Bone, joint and muscle	O (R)	Y	Y	Y
Joint reconstructions	O (R)	Y	Y	Y
Kidney and bladder	O (R)	Y	Y	Y
Male reproductive system	O (R)	Y	Y	Y
Digestive system	O (R)	Y	Y	Y
Hernia and appendix	O (R)	Y	Y	Y
Gastrointestinal endoscopy	O (R)	Y	Y	Y
Gynaecology	O (R)	Y	Y	Y
Miscarriage and termination of pregnancy	O (R)	Y	Y	Y
Chemotherapy, radiotherapy and immunotherapy for cancer	O (R)	Y	Y	Y
Pain management	O (R)	Y	Y	Y
Skin	O (R)	Y	Y	Y
Breast surgery (medically necessary)	O (R)	Y	Y	Y
Diabetes management (excluding insulin pumps)	O (R)	Y	Y	Y
Heart and vascular system	O (R)	O	Y	Y
Lung and chest	O (R)	O	Y	Y
Blood	O (R)	O	Y	Y
Back, neck and spine	O (R)	O	Y	Y
Plastic and reconstructive surgery (medically necessary)	O (R)	O	Y	Y
Dental surgery	O (R)	O	Y	Y
Podiatric surgery (provided by a registered podiatric surgeon)	O (R)	O	Y	Y
Implantation of hearing devices	O (R)	O	Y	Y
Cataracts	O (R)	O	O	Y
Joint replacements	O (R)	O	O	Y
Dialysis for chronic kidney failure	O (R)	O	O	Y
Pregnancy and birth	O (R)	O	O	Y
Assisted reproductive services	O (R)	O	O	Y
Weight loss surgery	O (R)	O	O	Y
Insulin pumps	O (R)	O	O	Y
Pain management with device	O (R)	O	O	Y
Sleep studies	O (R)	O	O	Y

Source: PrivateHealth.gov.au. Y indicates the clinical category is a minimum requirement of the product tier. (R) refers to restricted cover. O means that it’s optional for health funds to include or offer these as additional clinical categories.

It’s common for health funds to offer variations of each Hospital cover tier, such as ‘Bronze Plus’ or ‘Silver Plus’. According to PrivateHealth.gov.au, all policies must meet the minimum requirements of their base tier, but ‘Plus’ policies can include extra treatments from higher tiers. For example, if you only need Bronze cover but want access to a treatment usually included in Silver, you may be able to add it, depending on the fund.

How much is Hospital cover?

Hospital cover in Australia typically costs between $85 and $335 per month for singles, $150 to $540 for couples, and $165 to $600 for families, including single-parent families. Your premiums will vary based on factors such as your age, location, and the level of cover you choose – Basic, Bronze, Silver or Gold.

Your income also affects how much you pay, as it determines your eligibility for the Private Health Insurance Rebate. Higher income earners without Hospital cover may be charged the Medicare Levy Surcharge (MLS), while those who delay taking out cover after 31 could face the Lifetime Health Cover (LHC) loading.

Lastly, the health fund you choose can impact the cost of your premiums, especially if they’re offering discounts or sign-up incentives. These deals often include a few weeks free, cashback offers or eGift cards to add extra value when joining.

Here’s how to choose the best Hospital cover for your needs:

1

Assess your healthcare needs

Start by thinking about your current health and any foreseeable medical needs. Are you planning to start a family? Do you have a chronic condition that may require hospitalisation? Are you nearing an age where joint replacements or other age-related treatments might become relevant? Knowing what you may need cover for – whether now or in the future – can help you narrow down your choices. If you’re young and healthy, a lower level of cover might be enough, but as your circumstances change, your needs may too.

2

Review your existing cover

If you already have Hospital cover, it’s worth revisiting your policy at least once a year. Health funds often update what’s included or excluded under their policies, and your needs may have changed since you last signed up. Check if your current cover still aligns with your lifestyle, and whether you’re paying for things you don’t need, or missing out on things you do.

3

Compare your options

Use a health insurance comparison tool to compare policies side-by-side. Look beyond the price as what’s included in the cover matters just as much. Consider factors like the types of hospital treatments covered, whether you have access to your preferred or local providers, and whether you’ll be treated as a private patient in a public or private hospital.

4

Check the excess and co-payments

These are the out-of-pocket costs you may need to pay when you're admitted to hospital. An excess is a lump sum you agree to pay, usually once per hospital admission, while a co-payment is a set daily charge for each day you stay in hospital. Choosing a higher excess or co-payment can reduce your premium, but it's important to make sure the amount is manageable if you ever need to claim. Some policies also place a cap on how often you have to pay these costs – such as limiting the excess to once or twice per year, or capping the co-payment to a set number of days per admission – so it's worth checking the fine print to understand your total potential out-of-pocket costs.

5

Be mindful of waiting periods

Most Hospital policies have waiting periods for certain services, especially for pre-existing conditions, pregnancy, and psychiatric care. If you’re switching policies, you may not have to re-serve waiting periods for equivalent cover, but you will if you’re upgrading to a higher level of cover. Make sure you understand what you’re covered for immediately versus what you’ll need to wait for.

6

Choose a suitable level of Hospital cover

Hospital cover in Australia is categorised into four tiers: Basic, Bronze, Silver and Gold. Each tier includes a standard set of treatments, and some funds offer “Plus” versions (e.g. Bronze Plus), which include selected treatments from higher tiers. Your goal should be to choose a level that covers the treatments you’re most likely to need, without overpaying for services you’ll never use.

Chris Whitelaw General Manager Health Insurance Money.com.au

Chris Whitelaw, General Manager – Health Insurance at Money.com.au

“With premiums rising every April, making sure you’re getting the best value for money has never been more important – and it’s a big reason why so many Australians turn to us for help. Our experts take the time to understand your situation by asking the right questions, so we can compare Hospital policies not just on price, but also on what they cover, the benefits they offer, and which one is likely to be the best fit for your needs.”

Chris Whitelaw, General Manager – Health Insurance at Money.com.au

Here are the main reasons why Australians take out Hospital cover, according to our recent survey:

Avoiding the Medicare Levy Surcharge (MLS)

Higher-income earners without eligible Hospital cover are charged an additional tax – the MLS. Taking out cover helps you reduce or avoid this extra cost. The Medicare Levy Surcharge ranges from 0% to 1.5%, depending on your household income.

Choosing your own hospital or doctor

Private Hospital cover gives policyholders the flexibility to select their preferred hospital and specialist, rather than being assigned one through the public system. However, your ability to choose may still depend on the availability of doctors and hospital facilities at the time you need treatment.

Skipping public waiting lists

Accessing treatment through the private system can significantly reduce wait times for elective surgeries compared to the often lengthy queues in the public health system. Waiting periods will still apply on your cover for various treatments (e.g. 12 months for pregnancy).

Dodging the Lifetime Health Cover (LHC) loading

Australians who delay taking out Hospital cover past the age of 31 can be hit with a financial loading. The LHC is a 2% loading on top of your premium for every year you are aged over 30. Getting covered early helps avoid this long-term penalty.

Covering the whole family

Parents often take out Hospital cover to ensure their children have access to private care if they need it, especially for unexpected or urgent health issues. This often involves switching to family or single-parent cover, which provides protection for both the parent and their dependants.

Managing ongoing health conditions

People with chronic or pre-existing health concerns may choose Hospital cover for better access to treatment, rehabilitation or ongoing care that may not be readily available through the public system. Waiting periods on your cover will still apply, however.

According to our latest survey, 51% of Australians said they use their Hospital cover to claim benefits once or twice a year. Meanwhile, 31% reported never making a claim, 10% claimed 3 to 5 times annually, 5% used it 6 to 10 times, and 2% said they claimed more than 10 times a year.

Private Hospital cover vs Medicare

Private Hospital Cover

Choose your own doctor or specialist in hospital

Access to private hospitals and potentially shorter waiting times for elective surgery

May help you avoid the Medicare Levy Surcharge if you earn above the income threshold

Covers a private room (if available and included in your policy)

May cover for additional services like rehabilitation or psychiatric care, depending on your level of cover

Can avoid the Lifetime Health Cover loading by taking out cover before age 31

May allow you to claim on a broader range of services and treatments

Medicare

Doctor or specialist is assigned to you in the public system

Treated in public hospitals, with potentially long waiting times

You may need to pay the Medicare Levy Surcharge if you don’t have private cover and earn above the threshold

Typically accommodated in a shared room in public hospitals

Covers only medically necessary treatments under the public system

No protection from the Lifetime Health Cover loading – applies if you delay taking out private cover

Only covers services listed under the Medicare Benefits Schedule (MBS)

Cost is the biggest reason Australians don’t have private Hospital cover, with 80% citing it as the main barrier in our survey. While the cost of premiums can be a downside, 72% of those with cover said it gives them peace of mind.

In fact, insurers paid out $18.4 billion in Hospital benefits in the 12 months to September 2024, according to the latest APRA data.

Despite the cost concerns, many find Hospital cover worthwhile because it offers faster access to treatment, more choice of doctors, and protection from tax penalties like the Medicare Levy Surcharge.

With nearly half of policyholders regularly using their cover and billions paid out annually, Hospital cover can provide important financial and health security, especially when unexpected medical issues arise.