Private Health Insurance in Australia
Private Health Insurance (PHI) provides Australians with additional healthcare coverage beyond Medicare. It includes hospital cover for private hospital treatment and extras cover for services like dental, physiotherapy, and other allied health.
This guide explains how Private Health Insurance works, what types of cover are available, and how to make the most of your policy.
What is Private Health Insurance?
Private Health Insurance (PHI) is optional health coverage purchased from a registered health fund. In Australia, PHI complements the public Medicare system by providing access to private hospital care and rebates for services not covered by Medicare.
Over 13 million Australians hold some form of Private Health Insurance. Policies are offered by various health funds, each with different coverage options, prices, and benefit structures.
Hospital cover
Hospital cover pays for treatment in a private hospital or as a private patient in a public hospital. Benefits include:
- Choice of doctor and hospital
- Shorter waiting times for elective procedures
- Private room (depending on policy)
- Coverage for surgical and medical services
Hospital policies are categorised as Basic, Bronze, Silver, or Gold, with Gold providing the most comprehensive coverage. Having adequate hospital cover can also exempt you from the Medicare Levy Surcharge.
Extras cover
Extras cover (also called general treatment or ancillary cover) provides rebates for healthcare services not covered by Medicare. Common services include:
- Dental (general and major)
- Optical (glasses and contact lenses)
- Physiotherapy
- Chiropractic
- Psychology and mental health
- Remedial massage
- Podiatry
- Dietetics
Each extras policy has annual limits per service category. Once you reach the limit, you'll pay the full cost until your benefits reset (usually on your policy anniversary or 1 January).
How rebates work
When you use extras cover, your health fund pays a rebate (partial reimbursement) for the service. The rebate amount depends on:
- Your policy: Higher-tier policies generally offer higher rebates
- Service type: Different service categories have different rebate percentages
- Provider fees: If the provider charges more than the rebate, you pay the gap
- Remaining limits: Rebates only apply until you reach your annual limit
The gap (out-of-pocket cost) is the difference between what the provider charges and what your health fund rebates.
Choosing a policy
When choosing a Private Health Insurance policy, consider:
- Your healthcare needs: What services do you use regularly?
- Coverage limits: Will the annual limits cover your expected usage?
- Waiting periods: Can you wait for cover to start?
- Provider choice: Are your preferred providers recognised?
- Premium cost: Is the policy affordable for your budget?
Use government comparison tools like privatehealth.gov.au to compare policies from different health funds.
Waiting periods
Waiting periods are times when you cannot claim for certain services after starting a new policy or upgrading your cover. Common waiting periods include:
- 2 months: Most extras services
- 6 months: Some extras like major dental
- 12 months: Pre-existing conditions, pregnancy, major hospital services
If you switch health funds, you may be able to transfer your waiting period credit (the time already served) to the new fund.
PHI checklist
Use this checklist when managing your Private Health Insurance: