How Health Insurance Works

This website aims to answer your questions about private health insurance by explaining how it works, and who and what is covered. You can also compare policies from different Health insurers to help you to choose a private health insurance policy that is right for you.

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This website aims to answer your questions about private health insurance by explaining how it works, and who and what is covered. You can also compare policies from different Health insurers to help you to choose a private health insurance policy that is right for you.

In Australia, private health insurance is 'community-rated'. This means that everyone is entitled to buy the same product, at the same price (except for Lifetime Health Cover), and is guaranteed the right to renew their policy. A health insurer cannot refuse to insure you or refuse to sell you any policy you want to buy on the basis of your health or how likely you are to claim.

Some of the things to consider when looking into private health insurance include:

  • What is covered? In Australia, the public health system Medicare covers most Australian residents for health care. However, Medicare does not cover everything and you can choose to take out private health insurance to give yourself a wider range of health care options and more comprehensive cover.
  • How does it work? There are two types of health insurance: hospital & general treatment (ancillary or extras). You can buy them separately or most insurers offer combined policies. There will be limitations on what and when you can claim with any policy you buy.
  • What government incentives and surcharges affect my insurance? The Private Health Insurance Rebate, the Lifetime Health Cover rules, and Age-based discount affect how much you pay for private health insurance. The Medicare Levy Surcharge affects people earning above a certain threshold who don't hold private hospital cover. 
  • Overseas visitors & students If you are in Australia on a temporary visa, you should consider taking out some form of visitor's cover for the duration of your stay. On some visas, you may be required to take out a form of visitor's insurance.