Private health insurance helps cover healthcare costs that aren’t paid by Medicare. It’s split into two categories – hospital and extras cover.
Hospital cover helps cover things like accommodation, specialist, and theatre costs when you’re treated as a private patient.
Extras cover helps cover the cost of healthcare services that aren’t covered by Medicare. This includes things like dental check-ups, glasses, and physio.
With Bupa, you automatically get cover for Emergency ambulance services with all extras and hospital products available for sale (or you can buy it on its own).
You can buy hospital and extras cover separately, or together as a combined policy. There are different levels of cover to choose - from basic to more comprehensive cover.
If you’ve ever asked yourself ‘Why do I need private health insurance’ - don’t worry, it’s a common question.
In Australia, Medicare provides free access to public hospitals. It also covers, or subsidises, the cost of other health services like visiting a GP and getting blood tests. But it doesn’t cover everything.
Medicare doesn’t cover treatment at a private hospital, or other everyday healthcare services like going to the dentist or physio. That’s where health insurance comes in.
If you want to use these services without paying large out-of-pocket costs, you’ll need private health insurance.
If you earn over $105,000 as a single, or $210,000 as a couple, family or single parent, and don’t have private hospital cover, you may have to pay an extra charge called the Medicare Levy Surcharge (MLS).* The MLS is designed reduce the demand on the public health care system by encouraging Australians to take out private hospital cover.
If you earn more than the Medicare Levy Surcharge income thresholds, the only way to avoid the MLS is to take out suitable private hospital cover. Extras only cover won’t help you avoid the MLS.
The good news is that the cost of basic private hospital cover can be similar or less than what you'd pay for the MLS, so you could actually save money by buying hospital cover.
For hospital procedures that aren’t considered medical emergencies, the public hospital wait can be lengthy – sometimes over a year.
In 2021-22, the Australian Institute of Health and Welfare reported that the median wait time for a hip replacement at a public hospital was 153 days, while having your tonsils removed had an even longer median wait time of 168 days.
With private hospital cover, you skip the painful public waiting lists for your covered services, so you can get the treatment you need sooner.
Hospital cover gives you more choice and control if you need to go to hospital. You’ll be able to choose your doctor, preferred hospital and the timing of your procedure (subject to availability).
Plus, Bupa’s private room guarantee means you can stay in a private room at any Members First hospitals when you book more than 24 hours in advance. If a private room isn’t available, the hospital will pay you back $50 per night you're admitted#.
Nobody likes paying full price. The good news is that there are a couple of great incentives available that may help you reduce your premium.
Private Health Insurance rebate
If you are eligible for the Private Health Insurance rebate, the Australian Government will contribute a certain amount towards the cost of your private hospital cover. Your rebate is calculated using your age and income for surcharge purposes.
The rebate is quick and easy to claim – you can choose to get it as a reduced premium, or as a lump sum at tax time. Learn more about the Private Health Insurance rebate.
Age-based discounts
For those aged 18-29, Bupa offers an age-based discount on hospital cover. The discount is 2% for every year you’re aged under 30 and hold hospital cover (up to 10%). This means if you’re aged between 18-25, you’re entitled to the full 10% discount which will stay with you until you turn 41. After turning 41, your discount will gradually reduce each year.
Regular trips to the dentist and other everyday healthcare services like the physio and optometrist can really add up. That’s where extras cover can help.
Depending on the level of extras cover you choose, you can claim money back for a range of health services that aren’t covered by Medicare – like dental, physio and optical – up to yearly limits.
Without extras cover you would have to cover the entire bill for these services out of your own pocket. So, if these are services you regularly use then extras cover could help you save in the long run.
If you earn over a certain amount and have private hospital cover, you can avoid extra fees at tax time. This is called the Medicare Levy Surcharge (MLS).
If you need to pay the MLS, it will be calculated as 1%–1.5% of your total taxable income. Similar to income tax brackets, the higher your income, the higher your MLS will generally be.* The MLS is calculated with the rest of your tax at the end of the financial year. To learn more about what constitutes income for MLS purposes, visit the ATO website.
If this applies to you, you can avoid the MLS by buying and maintaining a suitable level of private hospital cover.
No. Medicare only covers the cost of going to a public hospital – it won’t pay anything towards the cost of your treatment, accommodation, or theatre fees at a private hospital. Private health insurance is the only way to reduce your out-of-pocket costs for private treatment.
Medicare provides free public healthcare in Australia – this includes things like seeing a GP, blood tests, and being admitted to a public hospital.
However, Medicare doesn’t cover costs associated with being admitted to a private hospital, or everyday healthcare like seeing a dentist, physio or chiro.
This is where private health insurance comes in handy. Private hospital cover helps pay towards the cost of your accommodation, theatre, and specialist fees at a private hospital. You’ll also skip public waiting lists for covered services and have control of who your doctor is, what hospital you’re treated at and when your treatment is scheduled (subject to availability).
Plus, you have the option to buy extras cover to help cover the costs of those everyday healthcare services.
By taking out private hospital cover before you turn 31, you’ll avoid paying the Lifetime Health Cover (LHC) loading. The LHC is an additional amount that is added to the cost of your private hospital cover premiums if you have not taken out and maintained private hospital cover from the year you turn 31.
For every year you are aged over 30, you’ll pay an extra 2% on your premiums, up to a maximum of 70%. The LHC loading is only removed after you’ve held cover for 10 consecutive years.
Some health funds like Bupa also offer an age-based discount for 18-29 year olds. For each year you are under 30, you receive a 2% discount when you first purchase private hospital cover (up to 10%). This means if you’re aged between 18-25, you’re entitled to the full 10% discount.
The information on this page and this calculator is a guide only and is not tax or financial advice. It does not take into account your personal circumstances and you should seek your own tax and financial advice.
*Applicable rebate percentages and income thresholds are reviewed annually by the Australian Government. Single parents and couples (including de facto couples) are subject to family tiers. For families with children, income thresholds are increased by $1,500 for each Medicare Levy Surcharge dependant child after the first child. For more information, visit the ATO website.
# Private room not covered for restricted benefit services or exclusions. At Bupa agreement hospitals only, room availability and eligibility criteria apply. For every night a private room is unavailable, you’ll receive $50 back per night from the hospital. Applies to overnight admissions only. Excludes 'nursing home type patients', emergency care, same-day stays or where a private room is medically inappropriate.