Cheap Private Health Insurance

Looking for private health care? Private health insurance can minimise your out-of-pocket costs. Our guide helps you find cheap, appropriate cover.

Last updated on April 29th, 2022 at 04:29 pm by Adrian Edlington

Best Cheap Private Health Insurance in Australia

Health insurance in Australia has been specifically designed to assist in reducing the cost of your healthcare while being treated in a Private Hospital. It also offers extra benefits to be used towards other health related services. With private health insurance policies beginning with basic levels of cover and extending to a full suite of benefits, we show you how to compare cheap health insurance and choose the right one for you — at a price that’s right.

How does cheap private health insurance work?

Cheap private health insurance works in the same way that comprehensive cover works; you just don’t get all the bells and whistles with it.

Getting care with private health insurance, you’ll be offered a choice of hospital and doctor, and usually you do not have to sit on a waiting list for procedures. Extras cover is separate to hospital cover and is offered either by itself as standalone cover or as an accompaniment to hospital cover. The ‘extras’ that extras cover provides are a range of healthcare treatments outside of the hospital system. These can include:

  • Eye checks and glasses
  • Physiotherapy
  • Dental work
  • Chiropractic, and
  • Remedial massage

Unfortunately, your private health provider won’t cover the total cost of the treatment but it will chip in a certain percentage of the cost, usually anywhere from 50%-90%.

When choosing a level of cover, there are generally different tiers of pricing — such as bronze, silver and gold — that range from basic services to more comprehensive cover. Choosing the most basic level of cover may help you save money on tax and health insurance costs, but keep in mind that the health care associated with the most basic cover may not be appropriate for you and your family.

While an expensive policy — such as a gold package — will come with a high price tag, the level of care offered is of higher quality. A gold policy will allow you the choice of hospital and doctor and will cover all treatments offered by the private hospital. In comparison, the bronze package offers a lower level of cover of more basic conditions such as certain cancers, stroke and broken bones. And then there is basic health insurance — this works a little bit differently. Basic health insurance offers:

  • Accident policies, which cover you in the event of an accident and take care of ambulance costs. You are also covered in a public hospital for rehab, psychiatric and palliative care. The cover basically lets you choose your own doctor in a public hospital.
  • Public hospital policies provide the same treatment as public patients receive — including wait lists — but you are able to choose your own doctor.

When comparing basic health insurance to gold health insurance, it becomes apparent that the services offered at the cheaper end of the spectrum may not be sufficient when considering the sort of treatment you’d like to receive coverage for. Many people choose to purchase basic health insurance and cheap private health insurance purely to avoid having to pay the Medicare Levy Surcharge (MLS).

While the price generally reflects the level of cover, it is still possible to find a cheap comprehensive cover — such as a gold policy — in comparison to other high-coverage products. The gold packages may come with a higher price tag than the bronze policy from the same provider, but when compared to other providers, it is possible to find a gold package for an affordable price, so you can have the cover you need at a price you can afford.

What factors affect the cost of cheap private health insurance?

The cost of private health insurance depends on a number of factors. There is no ‘one size fits all’ approach with private health insurance as it comes down to your individual circumstances and needs. Factors influencing the price include:

Level of cover

Generally speaking, the price rises as your level of cover rises. You may find that each type of plan is priced as follows:


As you can see, the price varies noticeably among different levels. Saving money on a lower level of cover might suit your budget, but ensure you the level of cover suits your needs.

Hospital, extras or both

Usually, if you choose extras cover on its own, it’s cheaper than all levels of hospital cover. This might suit your family if you’re happy with public health care but would like to reduce your costs at services like chiropractic, optical, dental, and physiotherapy. It’s important to note that extras on its own does not qualify you to avoid MLS or the LHC loading. In terms of price, the cheapest is usually extras on its own, then hospital cover on its own, with both options as a package being the most expensive.

Income range

The Private Health Insurance Australian Government Rebate is available at different levels to reduce the cost of private health cover. Eligibility for the rebate depends on your income, and goes as follows:


  • Base Tier: up to $90,000 inclusive
  • Tier 1: between $90,001 and $105,000 inclusive
  • Tier 2: between $105,0001 and $140,000 inclusive
  • Tier 3: $140,001 or over


  • Base Tier: up to $180,000 inclusive
  • Tier 1: between $180,001 and $210,000 inclusive
  • Tier 2: between $210,0001 and $280,000 inclusive
  • Tier 3: $280,001 or over

In terms of the rebate you stand to receive, this will depend on your age. Rebate rates fluctuate over time, but you’re likely to find that they’ll resemble the following:

Base Tier Tier 1 Tier 2 Tier 3
Under 65


Like all types of insurance, risk factors are influenced by age; as you get older, the likelihood of needing medical treatment rises. This is reflected in the price of the premium, as health insurance premiums will rise each year as you progress into the later stages of your life.

Number of people on policy

Understandably, the more people you have on your policy, the higher the cost will be. Couple’s cover is more expensive than singles, however, it’s usually cheaper than two single policies. Adding dependent children to the policy may sometimes attract a price change, but often children can be included in family cover for free.

The size of your excess

Like all private health cover, you’ll be required to pay an excess if you’re admitted to hospital as a private patient. With cheap private health insurance, you might need to pay a large premium when you use the health care, compared to a more expensive policy. Choosing an expensive excess can significantly reduce the cost of your premium, and could save you a lot of money in the long term.

Annual rate rise

The other impact to the cost of private health insurance is the annual rate rise that typically occurs in April of every year. The yearly price increase on private health insurance is to make sure that the premiums keep up with the increasing cost of health care such as medical equipment, complex surgeries, and hospital staff wages.

How does cheap private health insurance help me avoid paying the MLS?

The MLS is imposed upon higher income earners at tax time as a way to incentivise higher income earners to take out an adequate level of private hospital cover. The idea is to use private cover as a financial incentive to avoid paying the MLS and, as a result, the demand for public hospitals will be reduced.

If you’re looking for a policy primarily to avoid paying the MLS at tax time but aren’t concerned about actually using the health care, basic health insurance could be a good fit for you. If you are a high-income earner, having private health insurance could actually save you money. The MLS ranges from 1% to 1.5% depending on your income. If you earn over $140,000 as an individual, you will be charged the maximum rate which equals $2,100 (1.5% of $140,001). Taking out a policy for less than this amount will save you money on the difference. For example, a policy costing $1,200 per year will save you $900 in MLS that you avoid paying ($2,100 – $1,200).

The MLS kicks in for individuals once they earn $90,000 and $180,000 for couples.

How do I compare cheap private health insurance?

The pros and cons of cheap private health insurance



Comprehensive cover is expensive. Cheap private health cover gives you the peace of mind of having access to private health care without breaking the bank.

Take out a policy before age 30 to avoid the Lifetime Health Cover (LHC) loading

If you take out a policy after the age of 30, you will be charged a loading of 2% for every year above age 30. Accessing private health cover before 30 means that you avoid the impact of the lifetime health cover loading in years to come.

Reduce the amount of income tax you pay by avoiding the Medicare Levy Surcharge (MLS)

Cheap private health insurance can help you avoid paying the MLS which means overall you could be saving money.


Limits on cover

The amount of cover you have for each service isn’t unlimited. Your benefit limit resets every year, but if you go over the limit you won’t be able to make a claim for the remainder of the year. With cheap health insurance you’ll generally have the lowest limits.


While cheap private health insurance covers thousands of medical conditions, not all procedures or out of hospital healthcare services are covered.

Significant out-of-pocket costs

If you get treatment from your private hospital doctor for a condition that is restricted by your level of cover, you could be left with hefty fees to pay out of your own pocket.

Top tips for choosing a cheap private health insurance policy

Don’t pay for services that you don’t need

There is no point paying for something that you simply don’t have a need for. It might be nice having a policy with all the bells and whistles, but if your likelihood of using them is low, you could probably save yourself a lot of money by removing them. For example, if you don’t need pregnancy and obstetrics services, then choose an option that doesn’t include those. Covering only basic healthcare will come with a much lower price tag.

Choose within your budget

Health insurance is an ongoing cost so it’s essential to choose a policy that you can afford. Remember, there is usually a gap you’ll need to pay for health care services and if you can’t afford your policy, you definitely won’t be able to afford to pay a gap on top of that when it comes time to use it.

Understand what’s being covered

If you are choosing the cheapest health insurance purely to avoid paying the Medicare levy surcharge, remember that the cover included might be very close to what’s covered in the public health care system. If you want to avoid the MLS and use the health care benefits that come with private health cover, choosing a bronze package provides the best of both worlds — you’ll be adequately covered to avoid paying the MLS and you’ll be able to access private health care.

Review regularly

Health insurance is constantly changing and our needs are too. It’s a good idea to review your cover yearly to see if you can find a policy that better suits your needs and saves you money.

Frequently asked questions on cheap private health insurance

Is there a cut off age for private health insurance?

While you will need to pay the LHC loading after the age of 30, there is no maximum age to apply for health insurance. Cheap private health insurance is available to everyone and there are some great products available for seniors.

What is the best cheap private health insurance in Australia?

While there are awards given to successful health insurers in Australia, it really comes down to your personal needs. After considering your budget and needs, the best cheap private health insurance for you might be completely different to what’s best for someone else.

Does cheap private health insurance cover pre-existing conditions?

Yes, by law it has to cover pre-existing conditions, but you may find yourself with a waiting period of up to 12 months before you can access health care for any pre-existing condition.

Can I suspend my cheap private health insurance policy?

Yes. You need to organise a suspension through your insurance provider and you will be unable to make any claims while it is suspended. People often do this when they are leaving the country for an extended period. Keep in mind that you may need to pay the MLS for the days that your cover was suspended.

Is it compulsory to have private health insurance in Australia?

No. But if no cover is held, Australian tax payers without private hospital cover may be forced to pay a Medicare Levy Surcharge, depending on their income level.

How do I find out the finer details regarding what my cheap private health insurance policy covers?

You will find all the information you need to know about your policy in the Private Health Insurance Statement (PHIS). These documents give you a detailed summary of everything that is and is not covered by your cheap private health insurance policy.