Do I need Hospital Cover?

Whether you need hospital cover depends on your personal circumstances, health needs and financial priorities. For some people, hospital cover provides greater choice, faster access to treatment and valuable financial protection. For others, relying on Australia’s public healthcare system may be the right choice.

This guide explains what hospital cover is, who may benefit from it and the questions worth asking before deciding if it’s right for you.

Key Points

• Hospital cover helps pay for treatment as a private patient in hospital.
• Hospital cover provides greater choice over where and who treats you and can help you avoid public hospital waiting lists.
• Without hospital cover, you can still choose private treatment, but you’ll be responsible for what can be significant costs.
• Whether hospital cover is worth having depends on your healthcare needs, budget and personal circumstances.

What is hospital cover?

Hospital cover helps pay for treatment as a private patient in hospital. It contributes towards the cost of accommodation, theatre fees and other hospital services, while also providing greater choice over where and who treats you.

Hospital cover is separate from extras cover, which helps pay benefits towards services such as dental, optical and physiotherapy that are generally not covered by Medicare.

If you’d like to learn more about how hospital cover works, read our guide to What is Hospital Cover?.

Why do people choose hospital cover?

People choose hospital cover for different reasons. For some, it’s about having greater choice over their healthcare. For others, it’s about avoiding public hospital waiting lists, protecting themselves from the cost of private treatment or taking advantage of government incentives.

While everyone’s circumstances are different, these are some of the most common reasons people choose to have hospital cover.

Greater choice and control

One of the main reasons people choose hospital cover is the greater choice it provides when receiving hospital treatment. As a private patient, you choose your doctor or specialist and the private hospital where you’re treated. In the public system, your treating doctor is allocated by the hospital based on availability and your clinical needs.

For many people, having greater involvement in decisions about their hospital care is one of the key benefits of hospital cover.

Avoiding public hospital waiting lists

Another common reason people choose hospital cover is to access treatment through the private healthcare system rather than relying solely on the public system.

Australia’s public hospitals provide excellent care, however waiting times for non-emergency procedures can vary depending on the treatment required and local demand. Hospital cover gives you the option of being treated as a private patient, which means you avoid public hospital waiting lists.

For many people, the ability to access treatment sooner is one of the main reasons they choose hospital cover.

Financial protection

Hospital cover isn’t just about providing greater choice and faster access to treatment. It also helps protect you from the potentially significant costs associated with receiving treatment as a private patient.

Without hospital cover, you can still choose private treatment. However, you’ll generally be responsible for paying the costs associated with your hospital admission yourself. Depending on the procedure and hospital, these costs can be substantial.

While hospital cover doesn’t eliminate every expense and out-of-pocket costs may still apply, it can significantly reduce the amount you pay for eligible hospital treatment.

For many people, hospital cover provides peace of mind knowing they’re financially protected against potentially large and unexpected hospital expenses, rather than having to fund those costs themselves.

Government incentives and penalties

For some Australians, government incentives and penalties are another reason to consider hospital cover. Depending on your age and income, they can influence both the cost and value of your cover.

The key government initiatives that relate to hospital cover include:

• Australian Government Rebate – helps reduce the cost of eligible hospital cover for many Australians.
• Medicare Levy Surcharge – an additional tax that applies to higher income earners who don’t have eligible hospital cover.
• Lifetime Health Cover loading – a loading that increases the cost of hospital cover if you don’t take it out before a certain age.
• Age-Based Discount – a discount available to people who take out hospital cover before turning 30.

While government incentives shouldn’t be the only reason you choose hospital cover, they can have a meaningful impact on the long-term cost of maintaining your cover and are worth considering as part of your decision.

Who may benefit from hospital cover?

Hospital cover isn’t essential for everyone. However, depending on your circumstances, it may provide significant value.

Hospital cover may be worth considering if you:

• Want greater choice over where you’re treated and who provides your care.
• Want to avoid public hospital waiting lists for non-emergency procedures.
• Would benefit from financial protection against the potentially significant costs of private hospital treatment.
• Are planning to start or grow a family and want access to private obstetric care.
• Participate in sports or activities where there’s a greater chance of requiring hospital treatment.
• Have a family history or personal circumstances that make future hospital treatment more likely.
• May be affected by government initiatives such as the Medicare Levy Surcharge or Lifetime Health Cover loading.
• Value the peace of mind that comes from knowing hospital cover is there if you need it.

What questions should you ask before deciding?

Choosing whether hospital cover is right for you starts with understanding your own circumstances. Asking yourself a few key questions can help make the decision clearer.

• Am I comfortable relying on the public hospital system if I need treatment?
• Would I value choosing my own doctor or specialist?
• How important is it to avoid public hospital waiting lists for non-emergency procedures?
• Would I be comfortable paying for private hospital treatment if I didn’t have hospital cover?
• Do government initiatives such as the Medicare Levy Surcharge, Lifetime Health Cover loading or the Australian Government Rebate apply to me?
• How important is the peace of mind that comes from knowing hospital cover is there if I need it?

There isn’t a single right answer to these questions. The value of hospital cover depends on your healthcare needs, financial situation and the level of certainty you’re looking for if something unexpected happens.