How much should I get back from health insurance?

Whatever amount you’re spending on health insurance, you naturally want to make sure you’re getting good value for your money. If you’re looking at the amount of money you’re claiming and wondering whether you’re getting enough back, here’s what you need to know.  

Like any form of insurance, health insurance is there to help you financially when you need healthcare. But what makes health insurance different is the amount of events you can claim for. For example, with home insurance, you generally only claim if there is an unlikely but costly event like a fire, flood or damage. With health insurance, what you claim depends on the type of cover you buy – Hospital (depending on which tier), Extras (and which treatments) and/or Ambulance. There’s a range of reasons you might need to claim – everything from an ambulance call-out to a cataract surgery, fertility treatments to rehabilitation, weight-loss programs to hearing aids, and more. You can’t expect to claim back more on health insurance than you pay in premiums.  

How much money should you get back on health insurance?  

According to data from Private Healthcare Australia, the peak body for the health insurance industry, for every dollar Australians spend on health insurance premiums they get around 84 cents back. That’s only an average – some years you might get back more, while other years you might claim back nothing at all, depending on your level of cover and health requirements. And the older you get, the more likely you are to claim. But ultimately, unless you have a very expensive form of surgery, the amount you spend on health insurance over your lifetime will generally be more than you get back in claims.  

So, how do you know whether you’re getting enough back from your policy? Let’s break it down by policy type. 

How much should you get back from Hospital Cover? 

Hospital Cover is for hospital procedures where you’re admitted to hospital as a private patient (in a private or public hospital). Most healthy people won’t claim on their Hospital Cover very often, so instead of looking at how much money you’re getting back, think about how valuable it would be to have private hospital treatment if you needed elective surgery, such as a knee replacement or tonsillectomy. If you’re willing to wait a long time in the public hospital system, Hospital Cover might not be as valuable to you. According to health economist Professor Luke Connelly from the University of Queensland, Hospital Cover provides the best value on average when you’re in your mid-50s and older, and therefore more likely to claim – but there are no guarantees. Healthy young people can, and do, still get hospitalised.  

You can also look at your tax return and work out how much Medicare Levy Surcharge (MLS) you would pay without Hospital Cover. The MLS is an extra levy for people earning over a certain amount who don’t have eligible Hospital Cover. For example, if your income was $140,000 per year in 2024/25, you would have to pay 1.25% of your income to the ATO if you don’t have Hospital Cover. If that’s less than the amount you spent on your Hospital Cover premiums in that period you could look for a cheaper policy, or a lower tier policy, so you can still avoid the MLS and have some cover if you need it.  

How much should you get back from Extras Cover? 

Extras Cover is for health treatments outside hospital, by dentists and allied health professionals (think: physiotherapists, chiropractors and optometrists). Extras Cover is the form of health insurance where you need to claim back more than you spend on premiums to make it worthwhile. So have a look at how much you claimed back in the last year and compare it to your premiums. For example, if your annual premiums are $248 for mid-range Extras Cover, and you claimed back $200 on glasses and $700 on twice-yearly dental check-up and cleans, that’s good bang for your buck.  

How to switch health insurance policies  

If you’ve worked out that your health insurance isn’t providing good return relative to your premiums and claims, it’s time to look for a better policy. At healthslips.com.au, we’ve made this quick and easy. Our Calculator searches every policy from every insurer in Australia in a matter of seconds, giving you all of your options, so you can make the right choice. Look for a new health insurance policy or compare your current policy to others available. Give it a go and find a policy that gives you the best value for your budget, lifestyle and healthcare needs. 

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

Read more.