How much is Private Health Insurance in Australia?

Explore the costs of private health cover and factors that influence the price of premiums.

How much does private health insurance cost?

The price of private health insurance varies widely. The amount you’ll pay for your premiums will depend on your level and type of cover, and individual circumstances which determine whether any rebates, discounts or loadings will apply.

The good news is that your gender, health status and claims history won’t impact the amount you have to pay, and the base rate for your private health insurance premiums will not increase as you age – you’ll just need to maintain your hospital cover if you want to avoid the Lifetime Health Cover loading (LHC), but more on that later.

Let’s run through some of the various factors that influence the cost of private health insurance in Australia.

Average cost of private health insurance

If you have a look at our online quote tool, you’ll see that there is a wide range of cover options and costs to have private health insurance in Australia.

Policies start at the basic level and as they move through the mid-range to top tiers, more clinical categories (hospital cover) and services (extras cover) are included.  

The combination of hospital and/or extras insurance and the level of cover that you have for each is entirely your choice, but these variables will have a direct impact on the cost of your premiums.

Understanding different types of cover

Hospital cover

With hospital cover, your insurer contributes towards your hospital and medical costs if you are admitted as a private patient in a private or public hospital for a procedure included on your health insurance policy.

Extras cover

Also called ancillary cover or general treatment, with extras cover your insurer pays benefits towards the costs of dental care, optical (lenses and frames) and allied health services such as physiotherapy that are not generally covered by Medicare.

Combined cover

You can choose to take out either hospital or extras cover on its own, or to mix and match the two to create a combined cover.

Who needs to be covered?

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Single parent

Things to consider when choosing who to cover on your membership

Cover types are determined by the individuals included on the policy, and depending on your family makeup, you may choose to take out cover as a single, couple, family or single parent.

  • If you have a partner, you can take out two single policies or a joint private health insurance policy.
  • If some family members have greater healthcare or general treatment needs, such as planning a pregnancy or needing prescription glasses, it may make sense for some individuals to take out separate policies and hold a higher level of cover than others.
  • If you and/or your partner have a Lifetime Health Cover loading (LHC), this loading will be applied as an average on your joint policy.
  • The price of a couples and family policy is the same, meaning that child dependants aged under 21 and eligible student dependants aged between 21 and 25 years can be added to a joint cover at no additional cost.
  • If you and/or your partner are high-income earners and your combined taxable income falls above the family threshold, all members of your household will need to hold hospital cover to avoid having to pay the Medicare Levy Surcharge (MLS).

Other factors that affect the cost of private health insurance premiums


The costs of service delivery vary from one state or territory to the next and are impacted by:

  • the rate at which patients are accessing health services, and
  • service availability e.g., the number and location of private and public hospitals and healthcare providers.

These costs are used to calculate the price of premiums and will vary depending on where you live.


How much you earn can also impact your premium payments, as it will determine – along with your family situation and age – your eligibility for the Australian Government Rebate on private health insurance.

You can choose to have this income-tested rebate applied as a reduction on your regular premiums or paid as a lump sum when you lodge your tax return at the end of the financial year.

Find out more about the Australian Government Rebate on private health insurance, current income thresholds and the rebate entitlement (rate) you may be eligible for.

If you are earning more than the base tier threshold, then you will be taxed the applicable Medicare Levy Surcharge if you do not hold hospital cover.

Find out more about the Medicare Levy Surcharge.

How does your age impact the cost of cover?

Australia has an ageing population and increasing number of people living with chronic health conditions. With this comes higher rates of people needing health care.

To avoid the public health system being overwhelmed, the Australian Government has introduced a number of age-based initiatives to encourage people to take out hospital cover earlier in life and to maintain this cover.

Many private health insurance funds also offer discounts to encourage younger people to take out hospital cover before they turn 30.

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Lifetime Health Cover loading (LHC)

This is an Australian Government initiative to encourage younger people to take out health insurance before they turn 31 and keep this cover.

It is applied to your hospital premium if you take out eligible hospital cover after 1 July following your 31st birthday, at a rate of 2% for every year after this point (capped at 70%).

The LHC percentage rate that you lock in (known as CAE, Certified Age of Entry) is then applied to your premium for 10 years before it is removed.

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Australian Government Rebate

Your rebate entitlement – mentioned above – is also determined by the age of the oldest person on your policy.

This changes whether you are aged under 65, from 65-69 or over 70 and acts as another incentive for older Australians to have private health insurance.

The rebate applies to both hospital and extras policies.


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Age-based discount

GMHBA offer an age-based discount across all hospital covers for members aged between 18 and 29 years old.

This under 30s discount of 2-10% applies to hospital premiums only and is based on the age of the policyholder/s when they take out hospital cover.

If you keep your cover, this discount applies until you turn 41 and then gradually phases out after this point.

Private health insurance cost breakdown

The amount that you must pay to keep private health insurance cover is referred to as your premium.

Your individual premium amount will be dependent on the factors outlined above, and is inclusive of any discounts, any applicable Lifetime Health Cover loading (LHC) and your Australian Government Rebate on private health insurance, if eligible.

You can choose to pay your GMHBA premium weekly, fortnightly, monthly, quarterly, twice yearly or annually.

Using your hospital cover and associated costs

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When taking out hospital cover you can choose to have a $500 or $750 excess on your policy. This helps to bring down the cost of your premiums.

This excess will apply if you are admitted to hospital but only needs to be paid once per person (if applicable), per calendar year.

If an excess applies to your admission, you will be required to pay this to the hospital. The excess amount will be deducted from the benefit that GMHBA pays for your hospital bill.

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Out of pockets

You may have out-of-pocket expenses to pay once you are discharged from hospital, in addition to any excess.

The costs associated with your treatment will be impacted by your level of hospital cover and whether the treatment is included, restricted or excluded on your cover.

The type of medical services required, and whether your treating specialists are participating in the Access Gap Cover (and opting to use this for your treatment) will also determine if you will be left with a medical gap aka your out-of-pocket costs.

Understanding extras cover

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Set benefits

If you have an extras policy with set benefits, you’ll receive a fixed amount back every time you access a particular service (up to your policy limits).

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Percentage back

Like the name suggests, with this extras cover type your benefit will be a certain percentage off the cost of each appointment – until you reach your limit.

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Extras benefits usually have an annual limit for included services. These can be broken up into "sub limits" (which can be per person, per item or service), or lifetime limits (which don't reset once you reach the limit).

Get to know your extras cover

It's best to check your fact sheet for further details on what your policy includes.

Is private health insurance worth it? Evaluating the value

Working out whether having private health insurance is worth it really depends on your circumstances, your current and future health needs, and your perception of value for money when it relates to your and your family’s health.

It's easy to baulk at the costs of holding hospital cover when you’re young, fit, and healthy, but what if you develop a condition that needs ongoing medical care or you require hospitalisation in the future? You might prefer to have more choice in who treats you as well as where and when you receive this treatment. Private health insurance hospital cover can bring this peace of mind.

Making informed decisions about private health insurance

In Australia our public health care and private health insurance work hand in hand to support the community. Understanding the costs and the benefits it provides as well as the government incentives to take out hospital cover will help you to make an informed decision on whether it is right for you.

Your age, annual income, family situation, state of residence, and level of cover are all variables that determine the cost of your private health insurance premium. Any applicable loadings, rebates and discounts will also affect the amount you need to pay to keep covered. 

Consider your current life stage and health needs and how these may change in the future. Ask yourself if private health insurance is something that you see yourself having in years to come and think about the costs of taking this out later in life. Ultimately, it is a personal decision based on your individual needs and budget, but private health insurance can provide peace of mind knowing that you and your family will have a greater choice in their care when they need it most.

Frequently asked questions about private health insurance costs

In order to ease the burden, the Australian Government has introduced a number of incentives to encourage people to take out private health insurance, however it is not a requirement and whether you need it or not will be based on individual circumstances.

Private health insurance in Australia is designed to ease the burden on the public healthcare system, particularly for those who can afford it.

To help get the balance right, the Federal Government uses a carrot and stick approach to making sure that enough Australians are taking out hospital cover to avoid overwhelming public hospitals. Find out more about these government incentives below.

The tipping point

If you’re earning more than $97,000 as a single and $194,000 as a couple, family or single parent*, the Medicare Levy Surcharge (MLS) becomes something to seriously consider. As this point, the cost of the MLS – between 1-1.5% of your annual income – can make private health insurance hospital cover a more attractive offer. It may even be a cheaper option to take out private health insurance hospital cover than pay the MLS.

*Note: for families with children, the income thresholds are increased by $1,500 for each child after the first.



Private health insurance cannot be claimed as a tax deduction, although there may be benefits for high-income earners at tax time if they hold an eligible level of hospital cover.  

Find out more about the Medicare Levy Surcharge (MLS) and the Australian Government Rebate on private health insurance.

We’ve covered some of the incentives, discounts and loadings on this page, all designed to encourage more people to take out private health insurance.

All GMHBA hospital covers meet the complying private health insurance policy (CHIP) requirements for MLS purposes.

Extras cover on its own – provided by GMHBA or another fund, travel insurance or hospital cover provided by a fund outside of Australia are not considered appropriate hospital cover, and you may need to pay the MLS if you are a high-income earner.

The Medicare Levy Surcharge is separate to the standard 2% Medicare Levy that you pay in addition to the tax on your taxable income. Unlike MLS, whether you hold hospital cover or not has no impact on the requirement for you to pay the Medicare Levy.

Public patients in the public healthcare system do not have to pay for their treatment or hospital stay, but they also do not get to choose who treats them, have less say on when the surgery takes place and, if the treatment is considered non-urgent, may face a lengthy wait to undergo the procedure in a public hospital.

The cost of going to hospital is broken down into hospital costs (the costs of services provided by the hospital) and medical costs (the costs of receiving your treatment).

Patients choosing to receive treatment in a private hospital without private health insurance will have to pay all of their hospital costs and the portion of medical costs not covered by Medicare. These could be very costly.

Holding private health insurance hospital cover does not automatically mean that your hospital and medical costs (including specialist’s fees) will be entirely covered by your health insurer if you are admitted to hospital. We recommend seeking informed financial consent from your doctor(s) and contacting us prior to any hospital admission to understand what your out-of-pocket costs will be.

Find out more in our Going to hospital guide.

Hospital costs includes things such as:

  • hospital accommodation and meals
  • operating theatre fees
  • dressings and bandages received whilst admitted
  • prostheses (including medical devices)

Medical costs relate to your treatment while admitted to hospital and can include:

  • doctor’s fees
  • anaesthetist’s and other treating specialist’s fees
  • pathology and other diagnostic tests

The Medical Costs Finder is a helpful tool for understanding the typical costs of common medical procedures undertaken in a private setting in Australia. Keep in mind that these costs are indicative and should only be used as a guide. Speak with your specialist and hospital to understand their fees and charges prior to treatment We also recommend contacting us prior to any hospital admission.


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