Best Private Health Insurance Comparison in Australia: What to Check Before You Choose
Comparing private health insurance in Australia can feel complicated because there are hundreds of policies across many providers, and the “best” option depends on what you value most. A useful comparison focuses on the parts of a policy that affect your real costs and access to services, such as waiting periods, out-of-pocket expenses (the gap), and how an excess works if you’re admitted to hospital. It also helps to understand the government incentives and penalties that can influence the total amount you pay over time.
When you compare policies, it’s worth looking at the overall structure of cover, the timing rules around claims, and the levers you can adjust (like excess) to balance premiums against potential upfront costs. Many people also benefit from reviewing their policy regularly to ensure they’re not paying for cover they don’t need.
Start with the basics: comparing hundreds of policies
One way to approach the market is to compare a large range of policies and providers in one place. Some comparison options allow you to search hundreds of policies from multiple providers at no cost, with no mark-up, fees, or charges. Regardless of how you compare, the key is to focus on the policy details that will affect you most, rather than relying on a single headline premium.
Waiting periods: when you can actually claim
Health insurance policies usually have waiting periods. A waiting period is the time you must wait before you can claim on certain services after taking out a policy. These waiting periods can vary depending on the service type. For example, they can range from two months for basic hospital treatment to 12 months for pre-existing conditions or pregnancy-related services.
When comparing policies, check waiting periods carefully, particularly if you expect to use specific services in the near future. While waiting periods are common, there are some scenarios where you may be able to get health insurance with no waiting period. If timing is important to you, it may be worth confirming whether any circumstances apply that could reduce or remove the wait for certain services.
Out-of-pocket costs: understanding “the gap”
Even with private health insurance, you might still have out-of-pocket costs, often referred to as “the gap.” This can occur when a doctor’s or hospital’s fees are higher than what Medicare and your health fund will pay. The size of the gap payment can depend on the type of treatment, which hospital you visit, and other factors.
Because gap costs can vary, comparing policies isn’t only about premiums. It can also involve thinking through how and where you might use the policy, and how you would manage potential out-of-pocket expenses if fees exceed what is covered.
Excess: trading higher upfront payments for lower premiums
An excess is the amount a health insurance policyholder needs to pay upfront when admitted to hospital, as a contribution towards the cost of treatment. Many policies allow you to choose your excess amount. In general, you may be able to opt for a higher excess to lower your health insurance premiums.
When comparing hospital cover, it can help to decide what level of upfront cost you could comfortably manage if you needed to be admitted. A higher excess can reduce your ongoing premium, but it also means a higher cost at the time you claim. This trade-off is one of the most direct ways to adjust a policy to suit your budget.
Lower excess: typically means higher premiums but less to pay upfront if admitted to hospital.
Higher excess: typically means lower premiums but a higher upfront cost when you make a hospital claim.
Government incentives and penalties that can affect what you pay
Australia has several measures designed to encourage people to take out private hospital cover, especially earlier in life. Understanding these rules can be important when comparing policies, because the total cost of holding cover can change depending on when you join and your income situation.
Lifetime Health Cover (LHC) is a government initiative encouraging Australians to take out private hospital cover before they turn 31. If you join after that age, you’ll pay an extra 2% on your premium for every year you’re over 30, up to a maximum of 70%.
In addition, higher-income earners who do not have private hospital cover may need to pay the Medicare Levy Surcharge. This is an additional tax designed to encourage people to take out private insurance and reduce pressure on the public health system.
Community rating: premiums aren’t based on your health status
In Australia, health insurance premiums are not determined by your health status or risk. Under community rating, everyone pays the same premium for the same policy, regardless of age (including seniors), gender, or health conditions. This differs from other types of insurance, such as car insurance, where insurers can take account of factors like the policyholder’s age and past claims.
When comparing policies, this means the focus is less about being “rated” based on your personal health, and more about choosing a policy level and features that match your needs and budget.
Policy tiers: match cover level to what you need
Health insurance policies are sold in tiers to reflect the level of coverage available under the policy. When comparing, look at what is covered under each tier and match your level of cover to what you actually need (or are likely to need in the future). If you suspect you’re paying for inclusions you don’t use, it may be worth considering whether reducing your cover level could improve value.
Discounts and promotions: check the fine print
When you’re comparing providers, look out for offers and discounts. Some providers offer six or eight weeks free on new eligible policies, which can be equal to hundreds of dollars in saved premiums. Promotions can be helpful, but they’re easiest to evaluate when you also understand the ongoing premium and the policy settings (such as waiting periods and excess) that will apply after any initial offer period.
Review regularly: switching can be simple
Switching health insurers is described as a very simple process, so it can be worthwhile to regularly review what you’re paying and change if you can find better value elsewhere. Comparing health insurance at least once a year is one way to check whether your current policy still suits your needs and whether you may be overpaying.
Timing and premium increases: what to know about 1 April
Health insurers typically increase their premiums once a year on 1 April. Depending on the insurer, it may be possible to pre-pay your premiums for the remainder of the year at the current level, which would mean avoiding the premium increase for that year. If you consider pre-paying, it’s important to be confident you won’t need to cancel your policy after paying premiums in advance.
A practical comparison checklist
Check waiting periods, especially for services you may need soon (including pre-existing conditions or pregnancy-related services).
Consider potential gap costs, remembering out-of-pocket expenses can depend on treatment type and hospital.
Choose an excess level that balances premium savings with what you could pay upfront if admitted.
Factor in Lifetime Health Cover loading if you’re taking out hospital cover after age 30.
If applicable, consider the Medicare Levy Surcharge when deciding whether to hold private hospital cover.
Compare policy tiers and avoid paying for cover you don’t need.
Look for discounts such as weeks free on eligible policies, and weigh them against ongoing costs.
Review your policy at least annually, since switching can be straightforward and may improve value.
By focusing on these core factors—waiting periods, gap costs, excess, tiers, and the incentives and penalties that apply—you can make a clearer, more confident comparison across the Australian private health insurance market and choose cover that fits your situation.