Moving to Australia as a permanent resident is an exciting journey filled with new experiences and opportunities. One aspect of your new life that you’ll need to navigate is the Australian healthcare system, which includes private health insurance. In this article, we’ll guide you through the essentials of private health insurance in Australia so that you can better understand the system and make informed decisions.

Understanding the Australian Healthcare System

Australia has a world-renowned healthcare system that combines both public and private healthcare options. The public system, known as Medicare, provides free or subsidized medical care to Australian citizens and eligible residents. However, Medicare does have its limitations (Read the relevant post here). This is where private health insurance comes into play.

Choosing the Right Health Insurance Plan

When it comes to private health insurance, it’s essential to choose a plan that suits your needs and budget. You’ll find a variety of insurance providers in Australia, each offering different plans with various levels of coverage. Consider factors like your age, health condition, lifestyle, and the services you may need when selecting a plan. Websites like provide valuable information to compare and choose the right private health insurance plan.

Understanding Waiting Periods

Most private health insurance policies have waiting periods for certain services. This means you won’t be able to claim benefits for these services until you’ve been with your insurer for a specific duration. Waiting periods can vary between insurers and policies, so it’s crucial to understand the waiting periods associated with your plan.

Understanding Basic Terms

Insurance policies contain terms, some of which are probably familiar, whilst some are not. Here are some of them:

  1. Premium: This is what you pay for your insurance, usually every month.
  2. Excess: The amount you pay when you make a claim. A higher excess often means lower premiums.
  3. Extras: Cover for services like dental, physiotherapy, and more.
  4. Out of Pocket: An out-of-pocket cost is the difference between the amount a doctor charges for a medical service and what Medicare and any private health insurer pays. Out-of-pocket costs are also called gap or patient payments.

Lifetime Health Cover (LHC) Loading

Another important concept to be aware of is Lifetime Health Cover (LHC) loading. LHC loading is a government initiative encouraging Australians to take out private health insurance earlier in life. If you don’t take out private health insurance by the age of 31, you may face LHC loading when you decide to take out insurance later on. This loading increases the cost of your insurance premiums by 2% for each year you’re aged over 30 when you first take out hospital cover. It is important to note here that for migrants who have just arrived in Australia, you have until the later of 1 July following your 31st birthday or the first anniversary of your full Medicare registration to take out private hospital cover without incurring a Lifetime Health Cover loading. If the latter applies to you, your Lifetime Health Cover base day is the 12-month anniversary of your registration for full Medicare benefits (i.e. when you are eligible for a blue or green Medicare card). If you miss your Lifetime Health Cover base day or delay purchasing private hospital cover for more than 12 months after registering, you will have to pay 2% more in addition to your hospital cover premium for each year you are aged over 30 when you take out private health insurance. A wide range of private health insurance options are available in Australia specially customized for new immigrants. Resources: Lifetime Health Cover Loading

Understanding the Medicare Levy Surcharge

Citizens, permanent residents and certain eligible visa holders in Australia are subject to the Medicare Levy Surcharge (MLS) if their income exceeds a certain threshold and they don’t have private hospital cover. The MLS is an additional tax designed to encourage those with higher incomes to take out private health insurance. It’s important to be aware of your income and the MLS threshold, as taking out private hospital cover can help you avoid this surcharge. Resources: Medicare levy surcharge | Australian Taxation Office (

Extras Coverage

In addition to hospital coverage, private health insurance in Australia often includes extras coverage. Extras coverage typically includes services like dental, optical, physiotherapy, and more. Most extras treatments are not covered by Medicare. The level of extras coverage can vary from one policy to another, so be sure shop around and to consider your specific health needs when choosing extras coverage. It is not uncommon for people to enrol for generic plans that are expensive due to the numerous extra coverage provided, and end up paying higher premiums for cover which may never be used by the individual. Resources: Know more about extras cover – Finder

Health Insurance Government Rebates

The cost of private health insurance can vary significantly, and the Australian government provides rebates to help reduce the financial burden. The Private Health Insurance Rebate is income-tested and aims to make private health insurance more affordable. Resources: Australian Government Private Health Insurance Rebate

Reviewing and Updating Your Policy

As your circumstances change, it’s essential to review your private health insurance policy regularly. This ensures that your coverage continues to meet your needs and that you’re not paying for services you no longer require. Most insurers provide the flexibility to update your policy as needed.


In conclusion, understanding the nuances of the health care system and private health insurance in Australia is essential for permanent migrants. It can be a valuable investment in your health and well-being, offering peace of mind and additional options for healthcare. By considering factors like waiting periods, LHC loading, and government rebates you can make informed choices that best suit your unique circumstances. To explore private health insurance options and find the most suitable plan for you, it’s a good idea to visit the official Private Health portal and compare policies from different providers. This ensures you’re equipped with the knowledge needed to make informed decisions about your health insurance in Australia.

Good To Know

The cost of private health insurance varies, depending on the level of coverage you choose. Below is an example to give you a rough estimate of costs. Prices quoted are based on a single 30-year-old in Sydney, earning less than $90,000 with a $750 hospital excess from June 2022. Basic Cover – 86$ (Restricted cover for hospital rehab, psychiatric and palliative) Top Level Cover – 193$ (38 categories including joint replacements and pregnancy) Source – Finder

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