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Why every Australian should consider Private Health Insurance

21 July, 2016

For Australians wanting more control over their health care, private health insurance is important. Private health insurance can offer shorter wait times, greater choice of practitioners, greater flexibility appointments, security, and all-round peace of mind.

In Australia, the taxpayer-funded Medicare health system covers many medical, hospital and inpatient pharmaceutical costs. Under this system you can be treated for many services as a public patient in a public hospital by a qualified doctor or other health professional.

Medicare is a fantastic service. However, you may experience long waiting lists for doctors and medical procedures. If you need elective rather than emergency surgery, this could extend a number of months, or even years.

Additionally, many forms of healthcare are limited or not available in the public system, meaning if required you could be up for out-of-pocket expenses such as:

  • Ambulance fees
  • Chiropractic treatment
  • Theatre fees
  • Hospital accommodation costs
  • Home nursing
  • Podiatry
  • Physiotherapy
  • Occupational, speech and eye therapy
  • ‘Complementary’ therapies such as acupuncture
  • Glasses and contact lenses
  • Dental care
  • Certain pharmaceutical costs

What about 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. The surcharge aims to encourage individuals to take out private hospital cover and where possible, to use the private system to reduce the demand on the public Medicare system.

The MLS is income-tested and is levied between 1% to 1.5% of your income. This is on top of the 2% Medicare Levy you are already paying as an Australian taxpayer. If you’re a high-income earner (above $90,000 annually, for singles) you can avoid the MLS by taking out appropriate private hospital cover with a hospital excess of:

  • $500 or less for singles per calendar year
  • $1,000 or less for couples/families per calendar year

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There’s also the Lifetime Health Cover (LHC), which comes into effect following your 31st birthday. LHC is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover. This means, if you have not taken out appropriate private hospital cover before July 1 after your 31st birthday, you will be liable to pay an annual financial loading in addition to the base rate premium for private hospital cover. The loading is charged at 2% per year for someone who first took out hospital cover at age 30, and the maximum loading is 70%.

So to sum it up, if you’re an Australian resident, 31-years or over, earn more than $90,000 per year, and want control over your health care, you might think about looking into getting health insurance.

But even if you’re turning 21 and are not a high income earner, the benefits of holding private health insurance still apply. 

It’s important to remember that private health insurance does not just protect the ageing or families. No matter your age or position, private health insurance offers peace of mind for every stage in your life.

Young, fit and healthy?

If you are young, fit and healthy and not planning to have any children just yet, you’re likely feeling a little adventurous. You may play squash once a week putting pressure on your knees. You might cycle to work to get exercise. A basic health insurance package can offer benefits such as:

  • Accident cover
  • Knee arthroscopy or meniscectomy procedures
  • Appendicitis
  • Removal of tonsils and adenoids
  • Dental surgery
  • Ambulance cover
  • Natural therapies like acupuncture or naturopathy


Starting a family is one of the most important stages you’ll ever reach in your life, and it’s crucial that you feel protected and safe during this time. With private health insurance you can expect benefits such as:

  • Obstetrics-related services
  • IVF and other fertility treatments
  • Heart-related services
  • General and major dental
  • Ambulance and accident cover

A parent with young children?

There’s no way to predict when you or your children might become sick or suffer an injury, however there are certain measures you can take to help ease the stress of these situations. Private health insurance offers a financial safety net for serious, minor and everyday health issues, to take the pressure off caring for your family’s wellbeing. Climbing trees, riding bikes, playing in the rain - it’s all part of growing up, but it doesn’t come without risk. The right family cover could protect you from out-of-pocket expenses if your child is admitted to hospital, and also covers:

  • Accident cover
  • Ambulance cover
  • Broken bones and head injuries
  • Appendicitis
  • Dental services


So the kids have grown up, they’ve moved out of home, and you’re back to taking care of just yourself and your partner. The closer you get to retirement, the higher your risk of heart disease, eye surgery, and treatment for other serious conditions. You need to be prepared. Benefits you can expect from private cover include:

  • Dental surgery
  • Cancer treatment
  • Gastroscopies
  • Gynaecological services
  • Heart procedures
  • Hernia repair
  • Joint investigations and reconstructions
  • Obesity surgery
  • Stroke treatments
  • Depression


As a retiree you may feel like private health insurance is a pinch on your finances that you don’t need, but this is the time of your life when you need to protect your health the most. As a retiree, the risk of suffering a serious illness or accident is higher, and it’s important you get the care you need as soon as you need it. But despite your health risks being higher, if you were born before the 1st of July, 1934, you are exempt from Lifetime Health Cover age loading, meaning you’ll pay the same premium as someone aged 30. If you were born later than this date, the good news is you could be entitled to a 30% rebate from the government, giving you money back for your health insurance premium.

Benefits you can expect include:

  • Back surgery
  • Ambulance cover
  • Accident cover
  • Cancer treatment
  • Colonoscopies
  • Optical services
  • Physiotherapy
  • Health aids
  • Pharmaceutical
  • Hearing aids
  • Palliative care



All information contained in this article is intended for general information purposes only. The information provided should not be relied upon as medical advice and does not supersede or replace a consultation with a suitably qualified medical practitioner. CBHS endeavours to provide independent and complete information, and content may include information regarding services, products and procedures not covered by CBHS Health Cover policies. For full terms, click here.

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