Private health insurance FAQs and how it works

We explain what health insurance is, how it works and how it can benefit you.

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Understanding private health insurance

Also known as health cover, health insurance is an umbrella term for the types of insurances available to help cover your healthcare costs in Australia: hospital insurance and extras insurance.

What is hospital insurance?

Also known as hospital cover, hospital insurance helps cover costs when you’re admitted to hospital. It covers things like your doctors’ fees, accommodation and theatre fees.

RelatedUnderstand your hospital cover

What is extras insurance?

Also known as ancillary cover or extras cover, extras insurance helps cover the cost of everyday healthcare services including things like dental check-ups, physio appointments and glasses or contacts. These services are generally not covered by Medicare.

RelatedUnderstand your extras cover

Understand your hospital cover

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Do I need private health insurance?

Whether or not you get hospital or extras cover - or both - is entirely up to you. The benefits of having private health insurance are that you can go to a private hospital for treatment, choose your own specialist, make an appointment time to suit your schedule, and gain access to a private room^ (so long as it’s covered on your policy and a room is available). There are also Government imposed consequences that may apply if you do not get an appropriate level of hospital cover:

Medicare levy surcharge

The Medicare levy surcharge is a tax applied to high income earners who don’t have an appropriate level of hospital insurance. The tax is designed to reduce the strain on the public system by encouraging people to go to private hospitals instead of using public hospitals.

RelatedLearn more about the Medicare levy surcharge

Lifetime health cover loading

The Lifetime Health Cover loading in an extra cost applied to the price of hospital insurance for anyone who chooses to take out hospital cover for the first time after they turn 31. The loading is designed to encourage people to buy hospital insurance earlier in life and stay covered.

RelatedLearn more about the Lifetime Health Cover loading.

What are the benefits of private health insurance?

Hospital cover

Many Australians initially get hospital cover to avoid the Medicare levy surcharge, but the real value of private hospital insurance is in the freedom and control it gives you over your healthcare. With hospital cover, you can go to a private hospital for treatment and your health fund will help cover some of your costs. You’ll be able to choose your specialist and avoid the public hospital waiting list.

If you don’t have hospital cover but choose to be treated in a private hospital, you will have to fund your own treatment. If you don’t have hospital cover and go to a public hospital for treatment, you won’t have a choice of specialist and will have to wait on the public hospital waiting list— depending on your condition this could mean months or even years1 before you receive treatment.

Extras cover

Many Australians get extras cover to help cover the costs of common extras services, such as going to the dentist or getting treatment from a physiotherapist.

These services generally aren’t covered by Medicare, so without extras cover you would have to pay the full cost out of your own pocket.

Please note, extras cover won’t help you avoid the Medicare levy surcharge.

What is a not-for-profit health fund?

HBF is a not-for-profit health fund. A not-for-profit uses any money it makes to further its business objectives and cover the cost of running the business, like paying utilities bills and staff. Any surplus earnings (profits) are also used to help further the not-for-profit’s mission.

For-profit businesses have the same overheads as not-for-profits, however they use some or all profits to pay shareholders or investors.

What is community rating?

In Australia, insurance is either ‘community rated’ or ‘risk rated’. Health insurance is ‘community rated’. Community rating is part of private health insurance legislation and dictates that everyone living in the same state is entitled to get private health insurance and pay the same base price for the same health insurance policies. This means health funds cannot set a person’s health insurance premium using individual factors like age, gender, lifestyle or physical condition (premium is subject to your eligibility for lifetime health cover loading).

More ways we can help

What is hospital cover?
Learn more
Tax and rebates for health insurance
Learn more
What is extras cover?
Learn more

At HBF, we’re here for our members when they need us most

Experience you can trust

We've got over 80 years experience helping our members navigate health insurance and the healthcare system.

We’re not-for-profit

We’re one of the largest not-for-profit health funds in Australia and with no shareholders to pay, we focus on giving more back to our members.

We’re flexible

Mix and match our hospital and extras products to create cover that’s right for you.