Private hospital insurance helps cover the cost of inpatient hospital services and treatments (known as ‘clinical categories’). Different hospital insurance policies provide different levels of cover, but they all enable you to claim benefits for hospital accommodation, theatre fees and doctors’ fees (as outlined in the Medicare Benefits Schedule).
While hospital insurance benefits vary from policy to policy, all hospital cover gives you one big benefit. Choice. With hospital insurance, you’re free to choose how and when you’re treated in hospital, whether it’s in a private hospital or as a private patient in a public hospital.
- Choose your hospital, doctor and specialist
- Stay in a private room (if available and included on your cover)
- Avoid lengthy public hospital waiting lists
Is private hospital insurance essential?
No, it’s not essential, but if you find yourself in need of hospital treatment, insurance can make all the difference.
The Australian public health system is great, but it’s a safety net that’s having to cope under increasing pressure. Waiting times can be quite long, especially for elective surgery, and you don’t get any choice about who treats you or where you’re treated within the public system. In contrast, private hospital cover allows you to choose the hospital and doctor or specialist you want.
At HIF, we cover more than 1,300 private hospitals across Australia. Moreover, with AccessGap (our medical gap arrangement with the Australian Health Service Alliance), we can minimise and even eliminate your out-of-pocket costs.
How much shorter are waiting times with hospital insurance?
There are no hard and fast rules – waiting times in the public health system depend on your treatment or procedure and where you live. However, in general, you’ll have a much shorter waiting time if you have hospital cover.
Here’s a typical example of waiting times in the public system: a 2014-15 report by the Australian Institute of Health and Welfare found that patients in New South Wales who required a knee replacement waited an average of six months in the public system. Some patients (6.6%) had to wait over 12 months. That’s a long time to live with a potentially painful, debilitating condition.
If you have private hospital insurance, you can effectively fast-track your treatment and avoid the risk of getting ‘bumped’, which often happens in the public system. What’s more, you can choose your doctor or specialist and even your preferred date for surgery.
How does hospital insurance reduce my tax bill?
The Federal Government’s Medicare Levy Surcharge (MLS) was introduced to encourage people to take out private hospital insurance and relieve pressure on the public hospital system.
The MLS is paid by anyone earning over $90,000 per annum who doesn’t have private hospital insurance cover, and it increases incrementally with your earning. So, if you have hospital cover, you pay less at tax time.
Use our Medicare Levy Surcharge calculator to see how the Medicare Levy Surcharge works and how much you can save at tax time by taking out private hospital insurance.
Why should I take out hospital cover sooner rather than later?
It’ll save you money in the long run. If you leave it too late, you’ll be hit by the Lifetime Health Cover Loading – another government incentive designed to encourage people to take out private hospital insurance and reduce the burden on the public system.
The loading is an additional cost that’s applied to private hospital insurance premiums. The later you leave it to take our hospital insurance, the more expensive it’s likely to be when you eventually do.
Learn more about how Lifetime Health Cover Loading works and rewards you for taking out hospital cover at a younger age.