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HEALTH INSURANCE
Health insurance with no waiting period
By Sean Callery
What is Basic health insurance?
Basic health insurance in Australia refers to Basic Hospital cover, the most affordable and entry-level tier of private hospital insurance. It’s designed to meet the minimum legal requirements set by the government while offering very limited medical coverage.
As the lowest tier in Australia’s four-level hospital insurance system (Basic Hospital cover, Bronze Hospital cover, Silver Hospital cover, Gold Hospital cover), Basic Hospital cover includes only a few essential hospital services – often on a restricted basis. These typically include rehabilitation, psychiatric services and palliative care, and even then, access may be limited to public hospitals or come with significant out-of-pocket costs.
Basic cover is mainly used by people who want to avoid government taxes like the Medicare Levy Surcharge (MLS) or Lifetime Health Cover (LHC) loading, without paying high premiums. It’s not intended for those looking for comprehensive treatment options, but rather those seeking the cheapest way to maintain private Hospital cover.
What does Basic Hospital cover include?
Prior to the 2019 private health insurance reforms, Basic cover was often criticised as offering poor value for money and sometimes referred to as “junk policies.” While reforms have standardised what must be included at each tier, that stigma still lingers today.
Here’s what Basic Hospital cover generally includes:
- Accident-only cover: Some Basic policies are "accident-only" products. They provide treatment in hospital if you're injured in an unforeseen accident, along with emergency ambulance transport and treatment for related complications. These policies don’t cover planned procedures or chronic conditions.
- Ambulance services: Many Basic policies include emergency ambulance cover, but this varies by state and insurer. In some states (like Queensland and Tasmania), ambulance services are covered by the state government.
- Hospital psychiatric services (restricted): Basic cover must include access to psychiatric care, but typically on a restricted basis – meaning cover is limited to treatment in a public hospital, and you may not be fully covered for private hospital stays.
- Rehabilitation (restricted): This includes treatments like physical therapy following surgery or stroke. Under Basic cover, this is usually restricted, so you may only be covered in a public hospital with limited provider choice.
- Palliative care (restricted): Basic cover includes end-of-life or symptom-relief care, again usually in a public hospital and with access restrictions compared to higher cover tiers.
- Choice of doctor (limited to included services): For the restricted services mentioned above, some policies may allow you to choose your doctor or specialist in a public hospital, but for all other treatments, you'd rely entirely on the public system without choice or flexibility.
According to the latest data from the Private Health Insurance Intermediaries Association (PHIIA), Basic Hospital policy sales jumped 35.3% in 2024–25 compared to the previous year. Of the four hospital cover tiers, Basic saw the strongest growth, suggesting many new entrants are choosing more affordable entry-level options.
Are there waiting periods on Basic tier policies?
Yes, waiting periods apply to Basic Hospital cover, just as they do for all tiers of private hospital insurance in Australia. Regardless of whether you choose Basic, Bronze, Silver or Gold, insurers impose waiting periods before you can claim benefits for certain treatments.
Waiting periods include:
- No waiting period for accidents that require immediate hospital treatment due to an unforeseen injury.
- No waiting period if you're switching to another Basic level of cover and have already served waiting periods.
- 1 day for ambulance services, if included in your cover or covered by your state government.
- 2 months for mental health, rehabilitation and palliative care, which are the main restricted services included in Basic cover.
- 12 months for pre-existing conditions, which are assessed by your health insurer’s medical advisor.
These waiting periods are in place to prevent people from taking out insurance only when they need immediate treatment. If you’re switching from another policy and maintaining the same level of cover, your waiting periods may be waived.
How much is Basic private health insurance?
Basic Hospital cover typically costs between $110 and $550 per month for singles, $220 to $940 for couples and families, and $165 to $880 for single-parent families, according to Money.com.au analysis. This encompasses “Basic Accident Only” and “Basic Plus” policies.
Your exact premium for Basic Hospital cover will depend on several personal factors, including your age, where you live, your chosen health fund and whether you're eligible for the Australian Government Private Health Insurance Rebate. This rebate can lower your premium based on your income and age.
Other factors, like the Lifetime Health Cover (LHC) loading, may also apply. This is a penalty of up to 70% added to your premium if you didn’t take out eligible Hospital cover by July 1 after your 31st birthday.
If you're a high-income earner without Hospital cover, you may also be charged the Medicare Levy Surcharge (MLS) at tax time, which ranges from 1% to 1.5% of your income. Taking out Basic Hospital cover can be the most affordable way to avoid this surcharge, even if you don’t plan to use private hospital services.
Chris Whitelaw, General Manager - Health Insurance at Money.com.au
“Basic Hospital cover is the cheapest tier of private hospital insurance, but it really only suits a narrow set of needs. We speak to customers every day and quickly assess whether this bare-bones cover is right for them – or if they’d get far better value by stepping up to Bronze. In many cases, paying just a little more can unlock access to more treatments and greater peace of mind.”
Chris Whitelaw, General Manager - Health Insurance at Money.com.au
Pros and cons of Basic cover
Pros
- It’s the most affordable tier of private Hospital cover, making it accessible for budget-conscious Australians.
- Helps higher-income earners avoid the Medicare Levy Surcharge and the Lifetime Health Cover loading.
- It includes limited access to rehabilitation, psychiatric care and palliative care, plus accident cover and potentially ambulance services.
Cons
- Most treatments and procedures aren’t included, leaving you reliant on the public system for anything beyond restricted services.
- Services that are included (like psychiatric or rehab care) are often covered only in public hospitals, with little or no choice of doctor.
- In some cases, it isn’t that much cheaper than a Bronze policy, which usually has more benefits and inclusions.
Basic vs other Hospital cover tiers
Here’s a quick comparison of the key differences between Basic cover to the other hospital tiers:
Feature / Tier | Coverage scope |
|---|---|
Basic | Covers essential and emergency hospital treatments only |
Bronze | Covers 18 clinical categories, with many exclusions and restrictions |
Silver | Covers 26 clinical categories, with some exclusions or restrictions |
Gold | Covers all 38 clinical categories without restrictions |
Feature / Tier | Pregnancy and birth |
Basic | Excluded |
Bronze | Usually excluded |
Silver | Often excluded or limited, unless added to a Silver Plus policy |
Gold | Included, usually with 12-month waiting period |
Feature / Tier | Pre-existing conditions |
Basic | 12-month waiting period applies |
Bronze | 12-month waiting period applies |
Silver | 12-month waiting period applies |
Gold | 12-month waiting period applies |
Feature / Tier | Psychiatric and rehabilitation care |
Basic | Restrictions apply |
Bronze | Restrictions apply |
Silver | Restrictions apply |
Gold | Included with standard 2-month waiting period |
Feature / Tier | Premium cost |
Basic | Lowest |
Bronze | Moderate |
Silver | Moderate to high |
Gold | Highest |
Feature / Tier | Out-of-pocket costs |
Basic | Highest for non-covered treatments |
Bronze | Higher |
Silver | Moderate |
Gold | Lowest for covered treatments |
Feature / Tier | Ideal for |
Basic | Those needing minimal cover for emergencies only |
Bronze | People on a budget with basic hospital needs |
Silver | Those looking for mid-level cover |
Gold | People needing comprehensive care or pregnancy cover |
| Feature / Tier | Basic | Bronze | Silver | Gold |
|---|---|---|---|---|
Coverage scope | Covers essential and emergency hospital treatments only | Covers 18 clinical categories, with many exclusions and restrictions | Covers 26 clinical categories, with some exclusions or restrictions | Covers all 38 clinical categories without restrictions |
Pregnancy and birth | Excluded | Usually excluded | Often excluded or limited, unless added to a Silver Plus policy | Included, usually with 12-month waiting period |
Pre-existing conditions | 12-month waiting period applies | 12-month waiting period applies | 12-month waiting period applies | 12-month waiting period applies |
Psychiatric and rehabilitation care | Restrictions apply | Restrictions apply | Restrictions apply | Included with standard 2-month waiting period |
Premium cost | Lowest | Moderate | Moderate to high | Highest |
Out-of-pocket costs | Highest for non-covered treatments | Higher | Moderate | Lowest for covered treatments |
Ideal for | Those needing minimal cover for emergencies only | People on a budget with basic hospital needs | Those looking for mid-level cover | People needing comprehensive care or pregnancy cover |
Who should consider Basic Hospital cover?
Basic policies are the lowest tier of Hospital cover in Australia, with minimal services and treatments included. They may suit individuals or families on a tight budget who don’t want a broad scope of coverage or need to be treated as a private hospital patient. Some Australians who might benefit from a Basic policy include:
Young singles or couples in good health
If you're fit, rarely visit hospitals and mainly want cover for unexpected accidents, Basic may be a cost-effective safety net.
Low-income families with basic care needs
Those who need some protection for essential treatments, like ambulance cover or overnight hospital stays in a public hospital, may find Basic cover meets their needs without costly premiums.
People between policies or planning to upgrade
If you’re switching funds or in a transitional life stage – like finishing study or between jobs – Basic cover can help you maintain continuity for LHC purposes while keeping premiums low.
People wanting to avoid the MLS or LHC
Basic cover helps eligible Australians avoid the Medicare Levy Surcharge (MLS) if they earn over the income threshold, and it can also prevent the Lifetime Health Cover (LHC) loading if taken out before 1 July following your 31st birthday.
How to get the cheapest health insurance that’s not junk
Here’s how to find the best Basic health insurance policy:
Know what “junk” cover looks like
Some ‘Basic Accident Only’ Hospital policies only meet the minimum legal requirements and cover little more than public hospital care as a private patient. ‘Basic Plus’ policies may expand coverage to treatments like gastrointestinal endoscopy and tonsils, adenoids and grommets.
Compare beyond the premium
Cheaper monthly health insurance costs might hide high excesses or exclusions that leave you out of pocket when you need treatment. Read the Product Disclosure Statement (PDS) or speak to health insurance consultants to always check what’s included, what’s excluded, and whether your preferred hospitals or doctors are covered. The aim is to get the best health insurance policy for you overall at the cheapest price.
Consider a Basic Plus policy
Policies labelled ‘Basic Plus’ often include more common treatments while still being relatively affordable. These can be a smart middle ground if you want cover that’s not bare bones but still budget-conscious.
Choose a higher excess if it’s suitable
Choosing a higher hospital excess – like $750 for singles and $1,500 for families – can significantly reduce your premium. Just be sure you could afford to pay that amount upfront if you’re ever admitted to hospital.
Take a look at any incentives on offer
Some funds offer more value than just low premiums, such as health insurance sign-up discounts or access to virtual health services. If you're combining Hospital and Extras cover, check whether any waiting periods on Extras are waived for new members to help you claim sooner.
Is Basic Hospital cover worth it?
While the 2019 reforms aimed to phase out truly junk policies, many Basic policies still offer very limited cover – often only public hospital treatment or a few restricted services.
For people who mainly want to avoid the Medicare Levy Surcharge (MLS), Lifetime Health Cover (LHC) loading, or just need minimal protection in case of accidents, a Basic or Basic Plus policy can provide peace of mind.
That said, it’s essential to read the fine print. Some Basic policies are little more than tax-avoidance tools, while others include useful features like accident cover or inclusions for dental surgery and joint reconstructions.
If you’re young, healthy or between life stages and not expecting to use the cover much, it can be a reasonable choice – just make sure you’re not paying for something you can’t actually use. Always weigh up the pros and cons of health insurance before jumping in.
