Frequently asked questions
- What should I look out for when reviewing my insurance?
The Private Health Insurance Ombudsman recommends reviewing your policy at least once a year - your circumstances may change from time to time, so it’s important to review your health insurance policy regularly to make sure it still meets your health needs. For example, if you chose a hospital policy with restricted or excluded hospital services, you may want to increase your hospital cover as you reach certain life stages. For more information, see Managing your policy and the Ombudsman’s bulletin, Health Insurance Insider Issue #1
- I've just turned 30; do I have to purchase private health insurance?
Private health insurance is optional - however if you don't purchase hospital cover by the 1st of July following your 31st birthday, you will pay the Lifetime Health Cover loading on top of the premium of any hospital cover you later purchase. See Lifetime Health Cover for further information.
- I've just become a permanent resident; can I purchase private hospital cover without Lifetime Health Cover loading?
Yes. If you are over 31, you have one year from the date you registered for Medicare benefits to purchase private hospital cover without incurring a loading. See Lifetime Health Cover for further information.
Please note that general treatment (extras) cover, overseas visitors' cover, overseas student cover or international health cover does not qualify for Lifetime Health Cover purposes.
- I’ve just received a letter about Lifetime Health Cover. What do I need to do?
Recently, the Department of Health posted letters to Australian citizens and permanent residents who recently turned 31 or registered for full Medicare benefits. The letters were sent to inform you about the Lifetime Health Cover (LHC) rules, which may affect whether you decide to purchase private hospital insurance.
Please note that general treatment (extras) cover, overseas visitors’ cover, overseas student cover or international health cover does not qualify for Lifetime Health Cover purposes.
Private health insurance is optional in Australia but you should be aware that if you want to join, the cost of hospital insurance will vary depending on your age:
If you have turned or will turn 31 during the 2014-15 financial year - You have until 30 June 2015 to purchase private hospital cover without incurring LHC ‘loading’. If you purchase hospital insurance from 1 July 2015 onwards, then you will incur a loading which increases the cost of insurance. The older you are at the time of purchase, the higher the cost. If this applies to you and you have already taken out eligible hospital cover, then you don’t need to take any further action.
If you are aged 31 or over, and you registered for interim (blue card) or full (green card) Medicare benefits during the 2014-15 financial year – You have until the first anniversary of the date you registered for your Medicare card to purchase private hospital cover without incurring LHC ‘loading’. If you purchase hospital insurance after the anniversary date has lapsed, then you will incur a loading which increases the cost of insurance. The older you are at the time of purchase, the higher the cost. If you have commenced or intend to commence private hospital cover within 1 year of Medicare registration, you will need to confirm your registration date by requesting a letter from Medicare - contact Medicare (Department of Human Services) or visit your local Medicare branch. Supply the letter to your health fund on or after joining to have your loading reassessed.
Some exceptions may apply if you are overseas on your LHC deadline day. For more information, please refer to Lifetime Health Cover.
- I'm applying for a 457 or 485 visa; do I need private health insurance?
Yes. It is a condition of applying for a Visa Subclass 457 or 485 to make arrangements for a minimum level of health insurance. If your Visa was granted prior to this, your sponsor remains responsible for the cost of any treatment received in a public hospital. See Overseas visitors & overseas students for further information.
- I am visiting Australia from overseas; do I need to take out health cover?
Even if it's not a requirement under your visa, it is well worth considering taking out cover. If you need to visit a doctor or stay in hospital while you're here, you could be responsible for the full cost of treatment, which can be very expensive.
If you are visiting from a country that has a reciprocal health care agreement with Australia you may be eligible to receive immediate necessary treatment in Australia's public system, but should still consider taking out cover.
Some visas may require you to hold private insurance while you're in Australia, such as the 457 visa, 485 visa, or the temporary student visa.
See Overseas Visitors Health Cover for further information.
- I am a student from overseas coming to study in Australia; do I need to take out health cover?
If you are coming to study in Australia on a temporary student visa it is a condition of your visa to take out appropriate health cover. Students from Sweden, Norway, Belgium or New Zealand may have special arrangements. See Overseas Student Health Cover for further information.
- What is the Private Health Insurance Rebate?
Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The rebate, known as the Australian Government Private Health Insurance Rebate, is aged-based and income tested. The rebate is available for people with Medicare eligibility. If you have a Lifetime Health Cover loading, the rebate does not apply to the LHC loading portion of your premium.
If you are eligible for the rebate, you can have the rebate automatically deducted off your premiums or claim it back at tax time. See Private Health Insurance Rebate for further information.
Rebate Changes from 1 April 2014
From 1 April 2014, your rebate contribution from the Australian Government will increase based on a weighted average ratio.
The weighted average ratio is determined using a formula which takes into account growth in the Consumer Price Index and the industry weighted average premium increase.
Under the current legislation, an industry level approach applies through the use of the weighted average ratio. The weighted average ratio will result in 96.8% of the premium paid (excluding Lifetime Health Cover loadings) attracting a rebate. The change will come into effect on 1 April 2014 and will apply to any premium payments that are made on or after that date.
The rebate will continue to be paid as a percentage of premiums paid, excluding any Lifetime Health Cover loading that may be applicable. For more information about these changes, contact your health fund or check back on this website for further updates.
- Do I have to pay the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is levied on payers of Australian tax who do not have private hospital cover and who earn above a certain income.
To be exempt from the surcharge, your hospital cover must be held with a registered health fund and must cover some or all of the fees and charges for a stay in hospital. General treatment cover without hospital cover will not provide an exemption. See Medicare Levy Surcharge for further information.
- How do I find my policy?
To find your policy and compare it with others:
- Find your fund in the List of Health Funds
- Search for your policy on the fund details page (search is located at bottom of page)
- Select your product and click 'Compare Policies'
- Click the 'Find more policies' button
- Search for similar products from the compare page
- Once you have selected some extra products (we suggest 6 maximum) click on 'Compare selected policies'
Contact the individual funds for detailed information about any policy you are interested in.
- Premium Increases 2015
- The government has announced that private health insurance premiums will increase from 1 April 2015. If your premium has increased, your health fund is required to notify you in writing and you will receive updated policy information with more information about the change closer to the date.
The average increase across the industry in 2015 will be 6.18%. If your increase is higher than the average, your health fund was able to demonstrate that the rise is necessary to cover the benefits offered by your policy.
This year's average increase is less than the 7.4% increase in benefits that private health insurance companies paid to their members in the year to December 2014. The benefits paid by health funds can increase when hospital, medical or other health related costs rise, and if their members have an increase in the use of health services. Factors leading to cost increases can include wages for nurses and hospital staff, doctors’ charges, the cost of medical equipment and technology and more complex and costly procedures being available through private hospitals.
The Private Health Insurance Act 2007 requires health funds to submit detailed financial information to the Minister for Health before they can increase premiums. If the funds cannot provide sufficient information to demonstrate to the Minister that an increase would be necessary to meet their obligations to pay benefits to eligible contributors, then there is no change to the premium.
If you consider that you cannot afford the increased premium, there are still a number of options for you to maintain private health insurance. (You may need to maintain hospital cover if you wish to preserve your Lifetime Health Cover status and to avoid the Medicare Levy Surcharge.). It is worth shopping around, as your current health insurer or another insurer may be able to offer you a cheaper alternative private health insurance policy that still meets your needs.
You can check your current health fund's policies under Health Funds or use the Compare Policies tool to compare policies across all health funds. Please note: prices on the website will not reflect the premium increases until 1 April 2015 when the increase becomes effective.
For more information on this topic, you can read about Managing your policy or visit the Private Health Insurance Ombudsman's website to read the Health Insurance Premium Increases factsheet.