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LoansCredit CardsHospital cover pays towards your treatment when you are admitted to hospital as a private patient. It lets you be treated in a private hospital, choose your own doctor where one is available, and avoid the public elective surgery waiting list.
Since the 2019 reforms every hospital policy sold in Australia sits in one of four tiers — Basic, Bronze, Silver or Gold — and each tier has a legislated minimum list of clinical categories it must cover. That standardisation is what makes hospital policies genuinely comparable across funds.
Gold must cover every clinical category, including pregnancy and birth, weight loss surgery and dialysis. Silver drops the most expensive categories but keeps things like heart surgery and lung treatment. Bronze covers common procedures such as joint reconstruction, hernia and gynaecology. Basic covers very little and exists largely so people can hold a policy that satisfies the surcharge rules. Funds may also sell 'Plus' versions — Bronze Plus, Silver Plus — which add categories above the tier minimum, so two Silver policies are not always identical.
An excess is the amount you agree to pay towards a hospital admission before the fund contributes. Choosing a higher excess lowers your premium, and you only pay it if you are actually admitted. If you are holding hospital cover mainly to avoid the Medicare Levy Surcharge, check that your excess does not exceed the legislated maximum, because a policy above that limit does not exempt you.
A fund can apply up to two months for most conditions, twelve months for anything classed as pre-existing, and twelve months for pregnancy and birth. These are maximums set in legislation, and they reset only for cover you did not previously hold. If you switch funds at an equivalent level, you do not re-serve waits you have already completed — this is the single most misunderstood point about switching.
It does not pay for out-of-hospital care. GP appointments, specialist consultations in rooms, scans and blood tests are Medicare's territory, not your fund's. Day-to-day costs like dental and optical need extras cover instead. Hospital cover also will not always eliminate out-of-pocket costs: doctors can charge above the Medicare Benefits Schedule fee, and the difference is the 'gap'.
Any level of hospital cover satisfies the surcharge rules, including Basic, provided the policy's excess does not exceed the legislated maximum. Extras cover on its own does not exempt you — this catches a lot of people out. Check the current thresholds and excess limit with the ATO, as they are reviewed regularly.
No, not for cover you already hold at the same or a lower level. Your new fund must recognise waiting periods you have already served. If you upgrade to a higher tier, you may serve waits on the additional categories only.
Medicare and your fund together cover the Medicare Benefits Schedule fee for in-hospital medical services. If your doctor charges more than that, you pay the difference. Many funds run gap-cover arrangements with participating doctors that reduce or remove it, so it is worth asking for written estimates before you are admitted.
Medicare Levy Surcharge thresholds and government rebate percentages are reviewed regularly, so this page does not quote them. For the current figures see the ATO and the government's privatehealth.gov.au.
