Worked Examples and Checklists
How to compare private health insurance policies in Australia, step by step
A practical method for comparing hospital and extras policies like for like, using policy statements, the rebate, excess, gap cover and a worked comparison.
To compare private health insurance properly, start from the treatments you want covered, shortlist only policies whose clinical categories include them, then compare four numbers for each: the premium after rebate and loading, the excess and how often it applies, the extras benefits you would really claim, and the likely gap fees with the doctors and hospitals you would use. The headline monthly price is the least reliable guide. Every policy has a standard Private Health Information Statement (PHIS) on privatehealth.gov.au that lets you check these details side by side.
This is the overview guide for the Worked Examples and Checklists section.
Step 1: decide what the cover is for
Write down your reasons. The most common are:
- avoiding the Medicare Levy Surcharge
- avoiding a growing Lifetime Health Cover loading
- choice of surgeon and shorter waits for planned surgery
- specific likely treatment: pregnancy, joint or back surgery, cataracts
- regular dental, physio or optical costs
If your only reasons are the first two, the cheapest compliant hospital policy may be the right answer, and the cover versus surcharge example shows the maths. If you need specific treatment, the categories decide the tier.
Step 2: shortlist by clinical category
Use the tiers guide to find the lowest tier that covers your categories, then look at that tier and Plus policies one level up. Discard any policy where a category you need is excluded or restricted.
Step 3: read each Private Health Information Statement
The PHIS is a standard two-page summary. For each shortlisted policy, note:
| PHIS item | What to record |
|---|---|
| Hospital tier and covered, restricted and excluded categories | Matches your list from Step 1? |
| Excess | Amount, per admission or per year, waived for children? |
| Co-payment | Any daily charge in hospital |
| Waiting periods | Any shorter than the maximums |
| Ambulance | Emergency only, or also non-emergency transport |
| Extras | Services, benefit per service, annual limits |
| Premium | Monthly or annual, for your state and policy type |
Premiums differ by state, so compare quotes for your own state.
Step 4: convert to the price you would actually pay
For each policy: premium before rebate + LHC loading on the hospital part − rebate. Worked example (illustrative), single, aged 41, tier 1 in 2026–27 (16.079%), 22% LHC loading:
| Policy | Hospital premium | Extras premium | Loading (22% of hospital) | Rebate (16.079% of total before loading) | You pay |
|---|---|---|---|---|---|
| A: Bronze Plus, $750 excess | $1,900 | $0 | $418 | $305.50 | $2,012.50 |
| B: Silver Plus, $500 excess | $2,600 | $0 | $572 | $418.05 | $2,753.95 |
| C: Bronze Plus + mid extras, $500 excess | $2,050 | $850 | $451 | $466.29 | $2,884.71 |
Step 5: add the cost of a claim
Use a realistic scenario, such as a planned procedure costing $8,000 in hospital charges, and add the excess. Policy A: $2,012.50 + $750 = $2,762.50. Policy B: $2,753.95 + $500 = $3,253.95. If the procedure is in a category only Policy B covers, Policy A is not a real option. The hospital policy comparison tool does this sorting; the excess guide explains when a lower excess pays.
Step 6: price the extras honestly
For Policy C, list what you would claim: say two dental check-ups (benefit $240) and six physio visits (benefit $270), total $510. The extras premium after rebate is $850 × (1 − 0.16079) = $713.33. You would be $203.33 behind on extras. See is extras cover worth it.
Step 7: check gap arrangements
Ask your likely specialist whether they use your shortlisted insurer's gap cover scheme ("no gap" or "known gap"), and check whether your preferred private hospital has an agreement with the insurer. A cheaper policy with an insurer your surgeon does not use can cost more. The surgery gap fees example shows the arithmetic.
Step 8: switch carefully
If you are moving from an existing policy, keep your waiting periods and LHC history by following the switching checklist.
Comparison services
Government site privatehealth.gov.au lists every policy from every registered insurer without commission. Commercial comparison websites and brokers can be useful, but they are paid by insurers and may not include every fund. Ask which insurers they cover.
When to consult a professional
If tax effects are significant, such as a large bonus or investment losses near a threshold, a registered tax agent can confirm your tier. If you have a health condition, discuss likely treatment with your GP before choosing categories.
FAQ
Should I compare monthly or annual premiums?
Annual, after rebate and loading. Some insurers offer a small discount for paying annually or by direct debit.
Do premiums differ by state?
Yes. Insurers set premiums by state or territory, so a quote for Victoria may not match one for Queensland.
What is a restricted insurer?
A fund open only to certain groups, such as an industry or employer. Some offer competitive cover; check if you are eligible.
How often should I compare?
At least once a year, ideally before the 1 April premium change, and whenever your circumstances change.
Sources
- PrivateHealth.gov.au — compare every policy and download each Private Health Information Statement
- Australian Taxation Office — surcharge and rebate
- ACCC — consumer rights and comparison website issues
