Your biggest health insurance questions, answered 

Health insurance can be confusing, but healthslips.com.au is here to help you understand the ins and outs of private health cover. 

Here we answer some of the most common health insurance questions. 

Q. Do I need Private Health Insurance?  

Thanks to Medicare, you’ll always be able to get free treatment in public hospitals in Australia, regardless of whether or not you have private health insurance. There are, however, some medical treatments that Medicare doesn’t cover, such as dental treatments and ambulance services.   

If you get Hospital Cover, there are some additional benefits. You’ll be covered for more treatments and you’ll have a lot more choice.

You may be able to skip lengthy public hospital waiting periods, choose your doctor, and choose where you go for treatment and the type of accommodation.

Q. Why do I have to pay a Gap? 

You pay a Gap if your doctor or healthcare professional charges fees above the Medicare Benefits Schedule (MBS) fee set by the Australian Government.  

If you’re a private patient in a private or public hospital, Medicare will pay 75% of the MBS fee for your treatment, and your health insurance will cover the remaining 25%. However if your doctor or healthcare professional charges more than the MBS fee, your health insurer won’t cover that amount. This amount, the Medical Gap, will be charged to you directly – like in this example: 

Whether or not you have to pay a Gap will depend on your policy, insurer and healthcare professional’s fees. 

You also might be charged a Hospital Gap. Some insurers have agreements with certain private hospitals which means if you’re treated there, you won’t have any out-of-pocket costs for things like accommodation and meals. But if you receive treatment at a hospital your insurer doesn’t have an agreement with, there will be a Hospital Gap for you to pay.  

Q. Why does the price of health insurance keep going up? 

Every year, health insurance premiums rise to cover the increasing costs of healthcare services and health insurance claims. Health insurers can’t just increase their prices haphazardly – they must apply to the government, providing evidence that the price rise is justified. If the government approves the insurer’s application, the new price will usually come into effect in April the following year.

The good news is that if you’re unhappy with the amount your health insurance price has risen, you have the power to change your policy and insurer. By using the healthslips.com.au Calculator, you can compare your existing health insurance policy or calculate a new policy to find the best value for you. We’re the only comparison website that promises to compare every single insurer and policy in the market so you can make the best choice. 

Find out more about Our Brand Promises and what makes us different.

Q. How do I know if I’ve chosen the right health insurance? 

The right health insurance policy for you is one that matches your health needs, lifestyle, circumstances and budget. Some good questions to consider when choosing health insurance include: 

• Who needs cover? 
• What level of Hospital Cover do you need? 
• Do you need Extras Cover? 
• Is Ambulance Cover included in your state or territory? 
• What is your budget?  

Here’s a comprehensive Guide on Private Health Insurance or go directly to our handy article on how to choose health insurance to help you make a decision. 

Keep in mind that the policy that’s right for you now, might not be right for you in a year or more. That’s why we recommend reviewing your health insurance regularly, to make sure it’s still the right fit for your needs – especially if there’s been a significant change in your circumstances, such as having a baby or being diagnosed with a long-term health condition.    

Q. What’s the right age to take out health insurance? 

The right age to take out health insurance is before you need it. Unfortunately, there’s no way to tell when that will be, so it’s a good idea to take out health insurance as early as possible.  

The bottom line: no matter what your age or stage, there’s never a bad time to take out Private Health Insurance.  

If you take out Private Health Insurance before the age of 30, you’re eligible for the Age-based Discount, which will continue until you’re 41 (if you continue your insurance without any breaks) when it will gradually phase out.  

Find out how much the Age-based Discount could save you. 

It’s important to know that Hospital Cover will cost you more the later in life you join. Lifetime Health Cover Loading means you’ll pay a 2% Loading, on top of your premium, for every year you’re over 30 when you first begin health insurance (capped at 70%). After 10 years of continuous cover, this Loading will stop.  

Learn more about the Lifetime Health Cover Loading in our simple article and use the healthslips.com.au Calculator to work out how much it affects your insurance costs. 

Q. Can I take a break from my health insurance? 

Maybe you’re heading overseas for a long period, or you’re struggling financially. Whatever your reason for wanting a break from health insurance, it is possible – so long as you follow your insurer’s process. You’ll need to apply to your insurer to suspend your health cover, and you won’t be able to claim any health costs while you’re on a break. Talk to your insurer to find out what’s involved.  

If you take a break of fewer than 1,094 days, it won’t affect your Lifetime Health Cover Loading. However if you’re without insurance for 1,095 days or more, called Days of Absence, when you go back onto health cover, you’ll incur a Loading of 2% for every year you were outside that 1,094-day period.  

Find out more about the Days of Absence rules.

Will I pay more tax if I don’t have health insurance?  

Depending on your income level and family circumstances, not having health insurance might cost you at tax time. If you earn more than $97,000 as a single person or $194,000 for a family, you’ll be hit with the Medicare Levy Surcharge (MLS).  

Work out how much the Medicare Levy Surcharge will cost you.

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

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