New to health insurance? How to choose a policy

If you’re considering health insurance for the first time you might feel confused about where to start. Here, we guide you through the steps to help you decide whether you need health cover, and if so, how to choose a policy that’s right for you – without the jargon. 

On this page: 

• Do I need health insurance? 

• How much does health insurance cost? 

• What type of health insurance should I get? 

• Incentives and penalties that affect premiums 

• How do I choose health insurance? 

Do I need health insurance? 

All Australians can be treated in public hospitals for free under Medicare, which means you don’t need health insurance. But many people choose health insurance according to APRA with 45.6% of Australians having Hospital Cover, and 55.3% having Extras Cover. Here are the main reasons people choose to get health insurance:  

• faster treatment for non-urgent surgery  

• access to private childbirth 

• reduce their tax 

• lower health costs for out-of-hospital treatments like dental and physio. 

How much does health insurance cost? 

The price of health insurance is determined by what you’re covered for, not your age.  

There are 4 Hospital Cover tiers: Basic, Bronze, Silver and Gold, as well as Basic Plus, Bronze Plus and Silver Plus that give more cover within those tiers. 

For a couple with no kids living in Queensland, here are some price comparisons as at April 2026: 

Cheapest Hospital Cover 

• Basic –  $205.98/month, $750 excess, see-u by HBF Starter Hospital $750 Excess with Daily Co-Pay (Basic)

• Bronze – $260.30/month, $750 excess, see-u by HBF Saver Hospital $750 Excess with Daily Co-Pay (Bronze Plus)

• Silver –  $334.10/month, $750 excess, Westfund Silver Plus Everyday 750 Hospital

• Gold – $497.10/month, $750 excess, Mildura Health Fund Five Star Gold $750 Excess – F4

How much does Extras Cover cost? 

Extras Cover is for non-hospital health costs like dental, physio, optical and psychology. It doesn’t reduce your tax.  

For a couple with no kids living in Queensland, as at April 2026: 

• Cheapest Extras Cover – $45.45/month,  HBF Health Smart Start Extras, which covers  9 treatments including General Dental, Optical and Physio.

• Most Expensive Extras Cover – $400/month, Bupa Health Insurance Top Extras 90, which covers 25 of 27 treatments.   

How much does Combined Cover cost? 

You might choose to combine your Hospital and Extras Cover into one policy. It’s not necessarily cheaper but some people prefer it so they only have one payment.  

For a couple with no kids living in Queensland, here are some price comparisons for Bronze Hospital tier, as at April 2026: 

• Cheapest Combined Cover – $295.60/month, $750 excess, Frank Health Insurance Bronze Hospital & Bundables $250, which covers 21 of 38 Hospital Cover clinical categories and 13 of 27 Extras treatments including General Dental, Optical and Physio.

• Most Expensive Combined Cover – $728.90/month, $750 excess, Bupa Health Insurance Bronze Plus Advantage Hospital $750 Excess & Top Extras 90, which covers 28 of 38 Hospital Cover treatments and 25 of 27 Extras treatments.  

What type of health insurance should I get? 

To choose the type of health cover you want, decide what you want it for – saving tax, lowering health costs or peace of mind in case of future health issues.  

• Hospital Cover – covers private hospital treatment so you can access elective surgery faster, choose your own doctor and get your own room (if available). What health treatments are covered by Hospital Cover?   It helps you skip the Medicare Levy Surcharge if your income is over the MLS threshold. 
• Extras Cover – lowers non-hospital costs like dental, physio, optical and psychology. What health treatments are covered by Extras Cover?  There are claim limits, so check how much is covered to help you decide if it makes sense for you. Keep in mind that Extras Cover does not affect the Medicare Levy Surcharge.   
• Combined Cover – Hospital and Extras in one package. It generally won’t save you any money, but it means you’ll only pay one bill for 2 types of insurance. 
• Ambulance Cover – To cover ambulance treatment and transport. Ambulance treatment costs are often covered by Hospital Cover and Extras Cover policies, so you probably won’t need this type of cover if you’re buying other health insurance. (Note: you don’t need Ambulance Cover if you live in Queensland or Tasmania, as your state governments fund ambulance costs.)  

Who should my policy cover? 

• Single – covers one adult. 

• Couple – covers 2 adults in a relationship, living together (you don’t have to be married).

• Single Parent – covers one adult and one or more children. 

• Family – covers 2 adults in a relationship, living together, with one or more children (you don’t have to be married).

Compare all cover types and the cost of including a partner and children in your policy using the healthslips.com.au calculator. It’s fast, easy and free. 

Incentives and penalties that affect premiums 

Government incentives and penalties can significantly affect what you pay for health insurance: 

• Private Health Insurance Rebate – reduces your health insurance premium if you earn below these income thresholds and based on your number of children. 

• Age-based Discount – reduces your Hospital Cover premium if you start cover before 30 and maintain it. Not offered by all insurers. 

• Lifetime Health Cover Loading – adds 2% to Hospital Cover premiums for every year you’re over 30 when you start cover (removed after 10 years of continuous cover). 

Another penalty is the Medicare Levy Surcharge (MLS), which doesn’t affect your premium but will mean a higher tax (1-1.5% of income). The MLS applies if you earn over the threshold and don’t have Hospital Cover for the full financial year. 

How do I choose health insurance? 

Here are the 4 simple steps: 

1. Choose your cover type  

If you want cover for private hospital treatments and to avoid the Medicare Levy Surcharge, choose Hospital Cover. If you want cover for dental and allied-health treatments like chiro and physio,  you’ll need Extras Cover. Choose Hospital Cover, Extras Cover or both, based on your health needs and budget.  

2. Choose what treatments matter 

Look for a policy that meets your healthcare needs including current health conditions or future events, i.e. if you have a family predisposition to an illness. 

3. Compare policies  

With the free healthslips.com.au calculator, you can search every policy in Australia without commercial bias, and we guarantee you the cheapest policy.

4. Buy your policy  

When you’ve found the right policy, check the waiting periods, excess and any government incentives or penalties before buying. You’ll be covered once you’ve paid your first premium. If this is your first time buying health insurance, there will be waiting periods before you can claim.