Key takeaways
- The excess is an extra cost that you need to pay whenever you make a hospital claim.
- How big your excess is is up to you - a bigger excess will result in a lower premium.
- Most funds only require you to pay one excess per person per year, twice on family cover.
What is a hospital insurance policy excess?
A hospital excess is a payment you need to make when you're admitted to hospital. You'll be required to pay this amount upfront when you go to hospital – they will then bill your insurer for the remaining costs.
Some insurers require you to pay an excess every time you're admitted to hospital, while others others cap the amount at a maximum limit per year.
Pros and cons of a higher excess
Pros
- The higher the excess you pay, the lower your premiums will be.
- You only need to pay an excess if you're admitted to hospital.
- You usually don't have to pay an excess for same-day surgery, even though your premium is lower.
Cons
- You might also have to pay a co-payment, a daily amount paid towards your hospital stay.
- If you're a high income earner and you choose an excess over $750, you might have to pay the Medicare Levy Surcharge.
- If you can't pay your excess when you're admitted to hospital, you might not receive cover.
When don't you need to pay an excess?

Day Surgery
Many funds don't charge an excess if you need to go to hospital for just day surgery.

Accidental injury
If you're hospitalised because of an accident, most insurers will waive the excess requirement.

Child dependants
Most health funds waive the excess for kids being treated in hospital as an incentive for taking out family cover, and they'll continue to provide cover for dependent children until they reach the age of at least 21.
Excess vs gap payments
Hospital insurance doesn't cover every cost you'll have to pay in the private system. Suck, we know. What's worse is the excess is only one of the out-of-pocket costs most commonly associated with private hospital cover. The other big one is the gap payment.
In short, the gap payment is the different between the cost of a medial procedure and the amount that you are compensated for it by both your insurance fund and Medicare. For most treatments, Medicare will pay a little bit, and your insurance fund will pay the bulk of what's left. However, the final amount the cover can vary by A LOT. Some procedures can be fully covered, while others will leave you literally thousands of dollars out of pocket.
The government has a great website called Medical Costs Finder that can help you estimate how much a particular procedure might cost you. You can also call your health fund directly to get a more specific estimate.
Frequently asked questions
More guides on Finder
-
Weight loss surgery cost
Weight loss surgery tends to cost between $11,000 and $15,000 - but it can get way more expensive than that.
-
Bronze health insurance
What is covered by the third-highest tier of hospital insurance policies?
-
Gold health insurance
Gold hospital insurance is the most comprehensive hospital cover that money can buy – starting from around $57 per week.
-
Health insurance tiers
Find out what health insurance tiers mean and how much you’ll pay.
-
How much does an MRI cost?
How much does it cost to have an MRI and how much of that expense is covered by Medicare and private health insurance? Find out here.
-
Joint replacement health insurance
Want health insurance cover for knee replacements, hip replacements and other joint replacements? Here’s how to find the right policy.
-
Health insurance for MRI scans
Does health insurance cover MRI scans, and if so, for what treatments?
-
Health insurance for weight loss surgery
Health insurance for weight loss surgery comes with a 12-month waiting period, so it's worth getting sooner rather than later.
-
Basic hospital cover
Read our guide to see what is covered by Basic hospital policies in Australia.
-
Health insurance for insulin pumps
Insulin pumps are covered under all gold hospital policies, as well as on some Silver Plus policies. The details do differ between funds, however.