Australia has a dual health system combining universal public coverage (Medicare) with optional private health insurance. Understanding how both systems work together helps you use your insurance effectively and know when Medicare covers you versus when you need private insurance.
This guide explains the complete infrastructure: how policies are structured, how claims are processed, why premiums increase annually, how gap fees work, and the practical details of using your cover.
The Australian health system: public + private.
How Medicare and private insurance work together
Two systems, side by side. One covers everyone and is paid for through tax; the other is optional and paid for with premiums.
| Medicare (public system) | Private health insurance (optional) | |
|---|---|---|
| Coverage | Everyone | Optional purchase |
| Cost | Free at the point of care | Premiums, with a government rebate |
| Funded by | Taxes — the 2% Medicare Levy | Your premiums |
Medicare covers
- Public hospital treatment — emergency and elective
- GP visits (bulk-billed)
- Specialist appointments, with a referral
- Tests and scans, when prescribed
Medicare doesn't cover
- Dental — except public dental clinics for low-income earners
- Optical — glasses and contacts
- Physiotherapy, chiropractic, massage
- A private room in hospital
- Choice of doctor in a public hospital
Hospital cover adds
- Private hospital treatment
- Faster access — weeks rather than months or years
- Choice of doctor
- A private or shared room
- Avoids the Medicare Levy Surcharge for high earners
Extras cover adds
- Dental — which Medicare doesn't cover
- Optical — which Medicare doesn't cover
- Physio, chiro and massage — which Medicare doesn't cover
- Other allied health
How they interact
The same four situations, answered by each system.
| Situation | Medicare | With private cover |
|---|---|---|
| Emergency — broken arm | Free public hospital treatment | Can choose a private hospital, and your own doctor |
| Elective surgery — hip replacement | Public hospital, 6–12 month wait | Private hospital, 2–6 week wait |
| Dental filling | Not covered — you pay out-of-pocket | Covered by extras — claim a rebate |
| GP visit | Free if bulk-billed, otherwise a gap payment | Not covered — GP visits sit outside private cover |
Key principles of the dual system
Medicare covers everyone for essential healthcare. Private insurance supplements it with faster access to elective surgery, choice and comfort (your doctor, a private room), and coverage for services Medicare doesn't cover such as dental and optical.
You can never lose Medicare coverage. Even with private insurance, you remain eligible for public hospital treatment.
A typical week uses both without any conflict:
- Private health insurance for hospital cover
- A Medicare-funded GP for check-ups — free or cheap
- Private insurance for dental, through extras cover
- A public hospital in an emergency — Medicare, no cost
They complement each other rather than being mutually exclusive.
Private policies don't cover everything. The common exclusions are GP visits outside hospital; ambulance in most states (you need it included or covered separately); prescription medications, which the PBS covers rather than your insurer; home nursing care; and pre-existing conditions during waiting periods.
Medicare fills many of the gaps private insurance doesn't cover.
Who regulates what
Medicare: the Australian Government, through Services Australia. Private insurers: APRA for prudential matters, and the Department of Health for policies. Consumer protection: the Private Health Insurance Ombudsman.
Which means private insurers must follow strict rules, products must meet government standards, and you have recourse if an insurer acts unfairly.
How private health insurance policies work.
Policy structure
A health insurance policy has three components.
Hospital only, extras only, or combined — hospital and extras in one policy.
Hospital tiers are government-mandated categories: Gold (most comprehensive), Silver (mid-level), Bronze (basic clinical) and Basic (the minimum, mainly for avoiding the Medicare Levy Surcharge).
Extras levels are defined by each insurer: comprehensive / top / premium, mid-level / medium, and basic / starter.
The amount you pay per hospital admission. The usual options are $0, $250, $500, $750 or $1,000+, and a higher excess means a lower premium.
What makes policies different
Even within the same tier, policies vary.
Hospital cover variations:
- Restricted vs unrestricted networks: some policies only cover certain hospitals
- Excess amounts: $0–$1,000+, your choice
- Specific inclusions and exclusions: some Silver policies exclude pregnancy, others include it
- Gap arrangements: the quality of the no-gap or known-gap agreements the insurer holds with doctors
Extras cover variations:
- Annual limits: $300–$1,500+ per service category
- Waiting periods: 2–6 months, at the insurer's choice
- Services covered: the number and types of services
- Percentage covered: 50–100% of costs, up to the limits
Why this matters: two "Silver hospital" policies can be very different. Always read the Product Information Statement (PIS).
Waiting periods
You can't claim immediately — waiting periods apply.
| Cover | Period | What it applies to |
|---|---|---|
| Hospital | 2 months | General waiting period — accidents and emergency |
| Hospital | 12 months | Major services — surgery, pregnancy, joint replacements and similar |
| Hospital | 12 months | Pre-existing conditions |
| Extras | 2–6 months | Most services — dental, optical, physio. The insurer sets the specific periods: general dental is often 2 months, major dental often 6–12 months |
Why they exist: they prevent people getting insurance only when they need treatment, then cancelling.
Transfers: waiting periods may be waived if you're switching from equivalent or higher cover with another insurer, with no gap in coverage.
Benefit limits (extras only)
Hospital cover generally has no annual limits on covered services — unlimited claims for covered treatments. Extras cover has annual limits per service category.
Example mid-level extras
- General dental: $800/year
- Major dental: $1,200 per 2 years
- Optical: $300 per 2 years
- Physiotherapy: $500/year, about 10 visits
- Other services: $200–500/year each
How the limits behave
- Limits reset on the calendar year (1 January) or on your policy anniversary — it depends on the insurer
- Each service category has its own limit; using up dental doesn't touch optical
- Strategic usage: maximise benefits before limits reset, and claim high-value services first
Types of cover and what they include.
Hospital cover explained
Coverage for treatment as a private patient in hospital — either a private hospital, or a public hospital where you elect private treatment.
What it covers
- Accommodation — private or shared room
- Theatre fees for surgery
- Doctor fees — surgeon and anaesthetist — partially*
- Medical devices and prostheses (government-approved)
- Intensive care
- Hospital pharmacy — medications given during your stay
What it doesn't cover
- GP visits outside hospital
- Prescription medications outside hospital
- Ambulance in most states
- Out-of-hospital procedures
- Cosmetic surgery, unless medically necessary
* Doctor fees: your insurer covers a portion and Medicare covers a portion, so you may have a gap — see Gap fees and out-of-pocket costs, below.
Extras cover explained
Coverage for healthcare services Medicare doesn't cover, provided outside hospital.
Common services:
- Dental: check-ups, fillings, root canals, crowns, orthodontics
- Optical: glasses, contact lenses, eye tests
- Physiotherapy: treatment and consultations
- Chiropractic: adjustments and consultations
- Remedial massage: therapeutic massage
- Psychology: sessions, usually a limited number
- Podiatry: foot care
- Dietetics: nutritional counselling
- Natural therapies: acupuncture, naturopathy, if your policy includes them
How it works: you pay the provider up front, claim from your insurer, and receive a rebate — a percentage of the cost, up to your limits.
WORKED EXAMPLE
A dental filling on mid-level extras
- The filling costs $220
- The policy covers 80%, up to $800/year
- You claim: $176 rebate
- You pay: $44 out-of-pocket
Remaining limit: $624 for the rest of the year.
Combined cover explained
Combined is hospital and extras in one policy.
Advantages: convenience — one policy with one insurer; a discount, typically 5–15% against buying separately; and simplified claims.
Disadvantages: it may not be the cheapest option — sometimes mixing insurers is better — and the two are tied together, so you can't drop one without dropping both.
How claims work: in practice.
Hospital claims are largely handled between the hospital and your insurer. Extras claims are managed by you.
Hospital claims (admitted patient)
Four steps, from the moment a doctor recommends treatment to the statement landing in your inbox.
Your action: your doctor recommends surgery or treatment; you contact your insurer for claim pre-approval, giving them the procedure code, doctor and hospital.
Insurer response: they confirm coverage (yes, no or partial), estimate your out-of-pocket gap fees, and provide a claim or authorisation number.
Typical time: 1–3 business days.
Your action: bring your membership card, show the authorisation number, sign the admission forms, and pay your excess if one applies — say $500.
The hospital's action: verifies your insurance, confirms the procedure is covered, and notes the excess payment.
The hospital bills your insurer for accommodation, theatre and prostheses — typically $8,000–$25,000 for major surgery.
The doctor bills Medicare for the MBS portion (~20–40% of the fee), your insurer for the insurer benefit (~40–60% of the fee), and you for the gap, if they charge above MBS plus the insurer benefit.
You pay: the excess ($500, already paid at admission) and doctor gap fees of $0–$2,000+, depending on the doctor.
Automatic processing: hospital to insurer (direct billing), Medicare to you (the MBS rebate), and doctor to insurer if they use a claiming service.
You receive: a statement from your insurer showing the benefit paid, an invoice from the doctor if there are gap fees, and an explanation of benefits setting out what was covered.
Typical processing: 2–4 weeks.
Worked example: a hip replacement
Total procedure costs: $28,000. Here is who pays what.
| Charge | Amount | Medicare pays | Insurer pays | You pay |
|---|---|---|---|---|
| Hospital charges | $18,000 | — | $18,000 | $0 |
| Surgeon fee | $8,000 | $2,400 | $4,000 | $1,600 |
| Anaesthetist fee | $2,000 | $600 | $1,000 | $400 |
| Policy excess | $500 | — | — | $500 |
| Your total out-of-pocket | $500 excess + $1,600 surgeon gap + $400 anaesthetist gap | $2,500 | ||
Without insurance: around $28,000. With insurance: $2,500 — the insurance saved you $25,500.
In a public hospital, on Medicare: $0 — but the typical wait is 6–18 months.
Extras claims (out-of-hospital)
You receive treatment and pay the provider in full, then submit the claim one of three ways.
| Method | How it works | How quickly |
|---|---|---|
| In person (HICAPS) | The provider swipes your membership card, the claim is processed on the spot, and you pay only the gap amount | Instant |
| Online | Upload the receipt through your insurer's app, provide the service details, and submit — the rebate is paid to your bank | 2–5 business days |
| Complete a claim form, attach the receipts, and post it to your insurer | 1–2 weeks |
Most common: HICAPS in person — around 90% of extras claims.
What you need to claim: your membership number, a receipt with the provider's details, the service or item code (the provider usually includes it), and the date of service.
Example: a $220 dental filling, swipe the card at the dentist, a $176 rebate applied instantly, and $44 to pay the dentist.
How premiums are set and why they increase.
How insurers calculate premiums
Five factors determine what you pay.
Everyone the same age pays the same base rate, and premiums increase with age — typically every 5–10 years. A 25-year-old pays less than a 55-year-old for the identical policy.
Gold is the most expensive, then Silver, then Bronze, with Basic the cheapest. A higher excess lowers the premium.
Some insurers charge more in certain states, reflecting regional hospital costs. NSW is often higher than SA or TAS.
2% per year delayed past age 30, applied for 10 years, based on your age when you first took out cover.
- Combined hospital + extras: 5–15% off
- Loyalty discounts, with some insurers
- Direct debit: around 2% off
- Young adult discounts: ages 18–30
Premium increases: 1 April, every year
Industry-wide premium increases happen on 1 April annually. Three things drive them.
Rising healthcare costs
The largest single driver
Aging population
Community rating shares the cost
Utilisation increases
More claims, more often
Typical increase: 3–5% per year, the industry average.
Example: a premium of $2,400/year in March 2026, increased 4.5% on 1 April 2026, becomes $2,508/year — $108 more a year.
How it works: the government approves all increases. Insurers must apply to the Department of Health, new premiums take effect on 1 April, and your policy renews at the new rate.
Can you avoid premium increases?
No — increases apply to all policies, industry-wide. But there are three things you can do.
Get a better deal with a competitor and lock in the old rate for your first year. Timing matters: switch by 31 March.
Gold to Silver lowers the premium, and you can reduce the excess to compensate. You still get the premium increase, but on a lower base.
Drop services you don't use, reduce extras limits, and increase your excess if you rarely claim.
Gap fees and out-of-pocket costs.
A gap fee is the amount you pay above what Medicare and your insurer contribute. It is the single biggest surprise in a hospital bill.
Understanding gap fees
A doctor's fee is paid in three layers.
A government-set fee for the procedure. Medicare pays 75% of it for in-hospital treatment — on a $500 schedule fee, that is $375.
Your insurer pays an additional amount on top, typically covering most or all of the gap up to the average doctor fee — say $300.
If the doctor's actual fee is $1,200, then less Medicare's $375 and the insurer's $300, the gap you pay is $525.
Estimate your gap
Enter the fee your doctor has quoted, your policy excess, and whether your doctor participates in your insurer's gap scheme.
Your gap fee. In 10 seconds.
Your gap fee
$1,600
How the fee is covered
Total out-of-pocket
$2,100
$1,600 gap + $500 excess
An estimate. Ask your insurer for the exact benefit amount.
The 30% Medicare share and 50% insurer share are the proportions this guide's own worked examples use — an $8,000 surgeon fee met by $2,400 from Medicare and $4,000 from the insurer, leaving a $1,600 gap. Real benefits are set against the Medicare Benefits Schedule and vary by procedure, doctor and insurer. "Known gap" uses $1,000, the midpoint of the $500–$1,500 band described below. Under "no gap" the doctor agrees to charge no more than Medicare plus the insurer benefit, so the fee is capped and only your excess is left to pay.
Ways to reduce this:
- Ask your doctor about no-gap arrangements
- Check whether your insurer has a gap cover scheme
- Choose a doctor with lower fees
- Consider a lower excess — the trade-off is a higher premium
Gap cover arrangements
Some insurers run gap cover schemes with participating doctors. There are two kinds.
No-gap
- The doctor agrees to charge no more than Medicare plus the insurer benefit
- You pay: $0 gap
- Only available with participating doctors
- Common for routine procedures and basic surgeries
Known-gap
- The doctor charges a set gap amount — $500–$1,500 is typical
- Pre-agreed and disclosed before surgery
- You know the exact cost in advance
- Better than an unknown gap
How to find participating doctors: your insurer's website has a doctor search tool; you can ask your surgeon directly ("do you participate in my insurer's gap scheme?"); and hospital admission staff can check for you.
Minimising out-of-pocket costs
Use your insurer's doctor finder and ask the surgeon before committing. It may mean compromising on which doctor you see.
Fees vary significantly — $5,000–$15,000 for the same procedure. Choose a lower-fee surgeon, but don't sacrifice quality for price.
Some doctors offer instalments, hospitals have payment plans, and no-interest periods of around 12 months are common.
$500 rather than $1,000 costs more in monthly premiums, but it's worth it if you're having surgery.
Get an exact benefit quote before surgery, shop around based on it, and avoid surprise bills.
Hospital agreements and networks.
Hospital agreements determine which hospitals you can use — and a restricted policy at the wrong hospital can cost you the entire bill.
Unrestricted policies
- Any private hospital in Australia
- Any public hospital, as a private patient
- Maximum flexibility
- More expensive
Restricted policies
- Only specific hospitals — the insurer's network
- Out-of-network hospitals aren't covered, or only minimally
- Cheaper premiums — 10–20% less is typical
How to check: your Product Information Statement (PIS), the hospital finder tool on your insurer's website, or a call to your insurer before booking.
Example: a "Network Silver" restricted policy covers 150 hospitals nationwide and doesn't cover the other 200 private hospitals.
Out-of-network treatment: some policies pay $0 and you cover the full amount; others pay a minimal benefit, such as $300/day maximum. Always confirm before admission.
Why restricted networks exist
Insurers negotiate contracts with hospitals.
In-network hospitals agree to:
- Capped fees — they can't charge unlimited amounts
- Standard billing — predictable costs for the insurer
- Direct billing — the insurer pays the hospital directly
In return, hospitals get:
- Guaranteed patient volume — the insurer directs members there
- Streamlined claims and easier billing
- Preferred status, listed on the insurer's site
The insurer gets lower, predictable costs; you get lower premiums as those savings are passed on; the hospital gets more patients. The trade-off is less choice of hospital.
Public vs private hospitals
You can use your insurance in both — and there is a third option where you deliberately don't.
| Private hospital, private patient | Public hospital, private patient | Public hospital, public patient | |
|---|---|---|---|
| Room | Private or shared room | May get a private room, if available | Shared ward |
| Choice of doctor | Yes | Can request, if available | No — you're assigned a doctor |
| Who pays | Insurer covers most or all costs | Insurer covers medical and accommodation; Medicare pays its portion | Medicare — free treatment |
| Your excess | Applies | Applies | Your insurance doesn't apply at all |
Strategic choice: for an emergency, a public hospital — free and immediate. For elective surgery, a private hospital — faster, with choice. If you're budget-conscious, public as a private patient sits between the two. You can choose to be treated as a public patient even if you have insurance.
Regulation and consumer protection.
Three bodies oversee private health insurance, and each of them exists for a different failure you might otherwise be exposed to.
APRA
Australian Prudential Regulation Authority
Department of Health
Product and pricing rules
PHIO
Private Health Insurance Ombudsman
Your rights as a policyholder
Cooling-off period: 30 days from joining. You can cancel and get a full refund, no questions asked.
Transfer rights: you can switch insurers at any time, waiting periods transfer if the new cover is equivalent or higher, and you must have no gap of more than one day.
Information disclosure: insurers must provide a Product Information Statement, all exclusions must be clearly stated, and premium increase notices are required.
Complaints process: contact your insurer first through their internal complaints process; if it's unresolved, contact PHIO, which is free; PHIO investigates and can order a resolution.
Claims disputes: your insurer must explain any claim denial, you can request a review, and PHIO can investigate if the decision was unfair.
What insurers can't do
Four prohibited practices. If an insurer breaches one, report it to PHIO.
Discriminate based on health
- Can't reject you for pre-existing conditions
- Must accept all applicants
- Can't charge you more for health issues
Change your policy mid-term
- You're locked in for your policy year
- Changes only take effect on renewal
Deny claims unfairly
- Must pay valid claims
- Can't make up exclusions that aren't in the PIS
Mislead you about coverage
- Must accurately describe policies
- Can't hide exclusions
- Must give clear information
Policy lifecycle: from joining to cancelling.
Everything that happens to a policy over its life — and the timing traps in each stage.
Joining a policy
Use the privatehealth.gov.au comparison tool, get quotes from multiple insurers, check hospital networks, and read the Product Information Statement.
Online is the most common route, but phone and in-person through a broker or the insurer both work.
Personal details (name, date of birth, address), your income tier for the rebate, your age for the LHC calculation, and your Medicare number.
Immediate or a future date. The 1st of the month is worth choosing for clean billing.
Monthly is most common; quarterly, half-yearly and annual are all available. Direct debit is usually worth taking for the discount.
A membership card (digital or physical), your policy documents, and confirmation of coverage.
2 months general, 12 months for major procedures. You can't claim during a waiting period.
Changing your policy
There are three types of change, and they behave differently on waiting periods.
| Change | What it means | Waiting periods |
|---|---|---|
| Upgrade | Bronze → Silver → Gold | Waived for services already served; new services carry new waiting periods. Bronze to Silver resets waiting only for services Bronze didn't cover |
| Downgrade | Gold → Silver → Bronze | Services you already had must be re-served. Gold to Bronze means waiting 12 months for joint replacements again |
| Adding or removing components | Add extras to hospital-only; remove extras from combined | Waiting periods apply to any newly added services |
When changes take effect: usually at your next renewal date, though some insurers allow mid-term changes. Always confirm the effective date.
Transferring between insurers
The whole process hinges on step 3.
Get a quote, confirm the cover is equivalent or higher, and check the hospital network.
Say that you're transferring rather than joining as a new member, provide your current policy details, and confirm your waiting periods transfer.
Make sure the new policy starts before, or on the same day as, the old one ending. Critical: no gap, not even one day. If there is a gap, waiting periods restart and your LHC loading may be recalculated.
Give the required notice — usually 30 days — confirm the cancellation effective date, and get written confirmation.
Confirm the new insurer recognised the transfer, check the waiting periods were waived, and verify the coverage start date.
Recommended timing: before 1 April, to avoid the premium increase on the old policy, and at the end of a policy year for a clean renewal date.
Cancelling your policy
You lose continuous cover, so LHC loading may apply if you rejoin later; the Medicare Levy Surcharge may apply if you're a high earner; and waiting periods restart if you rejoin.
Contact your insurer by phone or online, provide the required notice — 30 days is typical — and request a cancellation date.
Written confirmation of the cancellation, a final premium statement, and an "evidence of continuous cover" certificate if you'll need it later.
Pro-rated to the cancellation date, as either a refund or a final payment.
Consider before cancelling: downgrading is cheaper and keeps your continuous cover; some insurers allow a temporary suspension; and most have financial hardship assistance programs. People usually cancel because their income drops below the MLS threshold, they're leaving Australia permanently, they can't afford the premiums, or they prefer the public system.
Common scenarios: using your cover.
Four situations, worked through end to end — from the moment of the referral to the final bill.
SCENARIO 1
Planned surgery — hip replacement
Situation: you need a hip replacement and have Silver hospital cover.
Process: a referral to an orthopaedic surgeon; contact your insurer for pre-approval with the procedure code, surgeon and hospital; book the surgery at an in-network hospital; pre-admission call from the hospital 3–7 days before; admission day (membership card, $500 excess, consent forms); 3–5 days in hospital with all in-hospital costs covered; discharge, with the hospital billing your insurer directly.
Total out-of-pocket: $2,500 — a $500 excess plus $2,000 in gaps ($1,600 surgeon, $400 anaesthetist). Without insurance: around $28,000. In a public hospital on Medicare: $0, but a 6–18 month wait.
SCENARIO 2
Emergency — a broken arm
Situation: you fall, break your arm, and need surgery.
Option A — public hospital: the ambulance takes you to emergency (free), surgery the same or next day (free), a shared ward (free), and an assigned doctor with no choice. Total cost: $0, and your insurance doesn't come into play at all.
Option B — private hospital with your insurance: going directly to a private hospital emergency is rare; more often you're admitted after a public ED stabilises you. Private room, choice of surgeon if available, insurance covers the costs, and you pay the $500 excess.
Most people use the public hospital for emergencies — it's excellent, fast and free. Insurance is more useful for the follow-up: a second surgery, physio through extras, or a private room for recovery.
SCENARIO 3
Pregnancy and birth
Situation: planning a pregnancy, and wanting a private hospital birth.
Important: there is a 12-month waiting period for pregnancy services. Get hospital cover that includes pregnancy now — not all Silver and Bronze policies do — and the 12 months starts today. You can fall pregnant during that time; you just can't claim pregnancy services until month 13.
Birth process: your own obstetrician, a private hospital, a private room. The insurer covers hospital accommodation, theatre and prostheses; you pay the excess plus obstetrician gap fees.
Typical costs: obstetrician fees $3,000–$6,000 (a $1,000–$2,500 gap after Medicare and the insurer), plus a $500–$1,000 excess — so $1,500–$3,500 out-of-pocket. A public hospital on Medicare is free, with less choice of doctor and room. You must get cover at least 12 months before the birth.
SCENARIO 4
A year of dental care on extras
Situation: you have mid-level extras with an $800 annual limit for general dental.
- March — check-up and clean, $220. Claimed instantly via HICAPS, $176 rebate, you pay $44. Remaining limit: $624
- July — filling, $280. Claimed via the app, $224 rebate, you pay $56. Remaining limit: $400
- November — another filling, $300. $240 rebate, you pay $60. Remaining limit: $160
Total used: $640 of the $800 limit. The annual extras premium is $720, so the value received is $640 so far — one more filling ($160) takes it to $800 claimed against $720 paid. Beyond the limit you pay out-of-pocket or wait for the 1 January reset.
Frequently asked questions.
No — waiting periods apply:
- 2 months for general services: basic procedures and accidents
- 12 months for major services: surgery, pregnancy, joint replacements
- 12 months for pre-existing conditions
Exception: accidents and emergencies may be covered immediately, depending on your policy.
Transfer exception: if you're switching from another insurer with equivalent or higher cover and no gap, your waiting periods transfer.
It's about network coverage.
Unrestricted: any private hospital in Australia, and any public hospital as a private patient. More expensive.
Restricted: only hospitals in the insurer's network. Out-of-network hospitals are not covered, or covered minimally. Around 10–20% cheaper.
Check before surgery: confirm your hospital is in-network.
No — private health insurance does not cover GP visits outside of hospital.
GP visits are covered by Medicare, either bulk-billed or with a gap payment. There is no private insurance involvement.
Exception: GP consultations inside hospital may be covered as part of a hospital admission.
The gap is the doctor's fee less what Medicare pays and less what your insurer pays.
Example: the surgeon charges $8,000, Medicare pays $2,400, your insurer pays $4,000 — your gap is $1,600.
To minimise it, choose doctors in your insurer's "no-gap" or "known-gap" schemes.
Calculate gap fees
Yes, you can switch at any time.
Important: make sure the new policy starts before or on the same day the old policy ends. Any gap between policies — even one day — restarts your waiting periods. Waiting periods transfer if the new cover is equivalent or higher.
Best time: before 1 April, to avoid the annual premium increase.
No — insurers must accept everyone.
But a 12-month waiting period applies to pre-existing conditions. After 12 months it's covered like any other service, and you can't be rejected or charged more.
Example: you join with knee pain and need knee surgery. You must wait 12 months from joining; after that, it's covered.
You have four options before cancelling.
1 — Downgrade your policy: a lower tier (Gold to Silver), a higher excess, or reduced extras.
2 — Contact your insurer: hardship programs, payment plans and temporary suspension (with some insurers) are all available.
3 — Consider dropping extras: keep hospital for MLS and LHC purposes, and drop extras to save money.
4 — Shop around: other insurers may be cheaper, and you can transfer to a better deal.
10 ways to reduce costs
It depends on your state and your policy.
States with free ambulance for residents: Queensland and Tasmania.
States where you pay: NSW, VIC, SA, WA, NT and the ACT — ambulance is not covered by Medicare there.
Private insurance: most policies include ambulance or let you add it. Check the "Ambulance cover" section of your PIS. The alternative is a standalone ambulance membership, around $50–$100 a year.
Always check your specific policy details.
1 — Contact your insurer: request a claim review through their internal complaints process, and get the decision in writing.
2 — If it's unresolved, contact the Private Health Insurance Ombudsman (PHIO): a free service that investigates independently and can order an insurer to pay. Call 1800 640 695, or go to privatehealth.gov.au/ombudsman.
3 — Keep records: all correspondence, doctor's letters, claim forms and notes from phone calls.
Yes — you can split your coverage, taking hospital from Insurer A and extras from Insurer B.
Advantages: you can mix and match the best deals, and it may be cheaper overall.
Disadvantages: two policies to manage, two billing cycles, no combined discount, and more administrative work.
Most people get a combined policy from one insurer for the convenience.
Compare hospital vs extras vs combined
Next steps: understanding your coverage.
Now that you know how the system works, here's how to check what you actually have.
Review your current policy
Six things to find in your policy documents:
- What tier? Gold, Silver, Bronze or Basic
- What's included? Read your Product Information Statement
- What's excluded? Important to know before you need it
- Network restrictions? Which hospitals can you use
- Excess amount? What you pay per admission
- Extras limits? The annual caps on each service
Before using your cover
Hospital admission checklist
- Pre-approval from your insurer, 2–3 days before
- Confirm the hospital is in-network
- Ask the surgeon about gap fees
- Bring your membership card
- Know your excess amount
Extras claim checklist
- Check the annual limits you have left
- Bring your membership card for HICAPS
- Keep the receipts if you're claiming online
- Submit within the claim timeframe — usually 2 years
Official resources
- The government comparison tool:PrivateHealth.gov.au
- Complaints and disputes:Private Health Insurance Ombudsman
- Insurer financial health:APRA
General information only: this guide provides general information about how private health insurance works in Australia. It does not take into account your individual circumstances. For personalised advice, consult your health insurer or a licensed financial adviser.
Not medical or insurance advice: this content does not constitute medical or insurance advice. Always consult healthcare professionals for medical decisions, and read your specific policy documents for coverage details.
Data currency: system mechanics are stable. Premium examples are based on February 2026 market data. Always verify current information with your insurer before making decisions.
Sources: information sourced from PrivateHealth.gov.au, the Department of Health, APRA and the Private Health Insurance Ombudsman.
Independence: we are an independent comparison service. We may receive commissions from insurers when users purchase policies. This does not affect how we present information.
Last updated: February 26, 2026 · Next review scheduled: May 2026 · Found something incorrect or outdated?Contact us
