Basic hospital cover may help you save on tax from $20
a week*. Basic policies won't cover much, but 'basic plus' policies can cover for a range of treatments.
Basic hospital insurance won't cover much. Policies only have to partially cover 3 treatments.
If you want better cover, go for a basic plus, bronze, silver or gold policy.
Basic hospital policies start from around $20
a week*, and may help reduce your tax burden.
*Prices are based on a single person living in Sydney earning less than $97,000 per year.
What is basic hospital cover?
Basic hospital cover in Australia is the entry-level tier of private health insurance. It's affordable, but only has very restricted coverage. Mostly, it only exists to avoid the tax impacts of health insurance. That's technically a little simplistic, but it's very important to understand that basic hospital cover is very, very basic.
This is because basic cover isn't required to cover anything at all, other than restricted cover for palliative care, rehabilitation and psychiatric services. While it may help you avoid the Medicare Levy Surcharge and LHC, 'Basic' often equates to 'barely any coverage'.
For this reason, it's often a better idea to start your health insurance comparisons at the Bronze tier. Bronze policies are only a little more expensive - like $10 to $20 a month for a single policy - but offer WAY more actual hospital coverage.
Pros and cons of Basic health insurance
Pros
Cheap cover that exempts you from the Medicare Levy Surcharge and the Lifetime Health Cover loading.
Lots of 'Basic plus' policies are available that give you affordable access to some Bronze-tier treatments.
Most Basic policies also include ambulance coverage – however, you will need to check the policy details.
Cons
Only required to offer restricted cover for rehabilitation, hospital psychiatric services and palliative care.
Many Basic policies won't cover treatment in private hospitals. Instead, they will cover you as a private patient in a public hospital.
Doesn't include coverage for common treatments like ear, nose and throat, bone, joint and muscle, and joint reconstructions.
Time for a check-up?
Find a better deal for you by comparing policies from 40+ funds.
HBF's Basic Hospital Plus Elevate policy won the 2024 Finder Awards for best basic hospital policy. These awards compared all eligible basic hospital policies on the market. It won based on value for money, meaning policies that covered more treatments in a private hospital for a lower premium scored higher.
Bupa's Basic Plus Starter Hospital policy came in second place for our basic category. It costs around $19 per week and covers treatments including tonsils, adenoids and grommets, joint reconstructions and miscarriage and termination of pregnancy.
Frank's Entry Hospital Plus policy came in third place for our basic category. It costs around $20 per week and covers treatments including dental surgery, tonsils, adenoids and grommets, joint reconstructions, hernia and appendix, and gynaecology.
What are the hospital health insurance tiers?
Each of the different health insurance tiers has to cover a standardised set of treatments. Here's a quick summary of each tier.
Gold hospital cover
Gold-tier hospital insurance covers all 38 treatments outlined by the Australian government. This includes treatments like joint replacements, pregnancy and insulin pumps, as well as all services covered by Silver-tier policies.
Average premium: $280.44 a month for a single policy.*
Lowest premium: $196.56 a month for a single policy.*
Silver hospital cover
Silver-tier hospital insurance covers at least 26 treatments outlined by the Australian government. This includes treatments like dental surgery, lung and chest, and podiatric surgery, as well as all services covered by Bronze-tier policies.
Average cost: $162 a month for a single policy.*
Lowest premium: $116.04 a month for a single policy.*
Bronze hospital cover
Bronze-tier hospital insurance covers at least 18 treatments outlined by the Australian government. This includes treatments like joint reconstructions, gynaecology, and ear, nose and throat, as well as all services covered by Basic-tier policies.
Average cost: $103.94 a month for a single policy.*
Lowest premium: $89.80 a month for a single policy.*
Basic hospital cover
Basic-tier hospital insurance isn't required to fully cover any treatments outlined by the Australian government, but it does need to have restricted cover for rehabilitation, hospital psychiatric services and palliative care. Generally, Basic cover is primarily used to avoid the Medicare Levy Surcharge and Lifetime Health Cover loading.
Average cost: $87.81 a month for a single policy.*
Lowest premium: $77.67 a month for a single policy.*
*Average prices updated April 2025, in line with Finder's database of health insurance policies. Prices are based on a single individual with less than $97,000 income and living in Sydney with a $750 excess.
Our expert says
"I took out Frank Basic Cover (then Health.com.au) back in 2018 and have had no issues. I haven't had to claim on it, but having it has saved us on tax as we would have to pay the Medicare Surcharge Levy without it and it's good to know we have ambulance cover (although we also get this through our ahm extras). Overall, if you need basic cover, Frank is a good one."
One thing basic hospital cover isn't very good for is actually providing hospital cover. If you want a policy that actually provides some private hospital treatment options, bronze policies are probably a better place to start your comparison.
Avoiding tax
If you earn more than $97,000, you'll be subject to the Medicare Levy Surcharge (MLS) on your income tax. The MLS is a tax of up to 1.5%, and can quickly get into the thousands of dollars. Having a hospital health insurance policy is the only way to be exempt from the MLS. Fortunately, the cost of a Basic-tier policy can sometimes be less than the amount the MLS would cost you, meaning that getting a Basic policy would actually save you money.
Avoiding the LHC
Getting Basic health insurance will help you avoid the Lifetime Health Cover (LHC) loading, which can make health insurance more expensive after a certain age. For every year you don't have hospital coverage after your 31st birthday, the LHC will add 2% onto the cost of a health insurance policy if you decide to get cover later. This only caps out after 35 years, at 70%.
If you never get hospital cover in your whole life, you'll never need to pay the LHC. However, if you think you might want hospital cover eventually, getting a Basic policy now can prevent you from ever being charged the LHC.
Ambulance cover
While Basic policies don't offer cover for many treatments, they often include ambulance cover, which can be very useful if you need ambulance transportation – even to a public hospital. Not all hospital policies automatically include ambulance, so you'll need to check the product details.
Australia hospital insurance comes in 4 different tiers: Basic, Bronze, Silver and Gold. Each tier is required to cover a standardised set of treatments, set out by the government. This makes it easier to compare different policies, as they are all required to cover the same set of treatments.
Basic-tier hospital policies do not cover very many treatments – they are only required to offer restricted cover for rehabilitation, hospital psychiatric services and palliative care. Generally, Basic hospital cover is best suited to avoiding the MLS and LHC. However, there are some 'Basic plus' policies that offer cover for additional treatments above the mandatory requirements.
A 'plus' policy offers cover for additional treatments (other than those required by the government for a given tier). An example of a 'Bronze plus' policy would be one that offers restricted cover for the 3 mandatory treatments, but also offers coverage for joint reconstructions, which is only mandatory for Bronze-tier policies.
Yes, Basic policies do cover pre-existing conditions, provided they are covered in the base policy and you serve a 12-month waiting period. This is a feature common to all Australian health insurance policies, as it is mandated by the government.
A seasoned journalist with over 10 years of experience in news, politics and finance reporting, Tim has previously held roles at the ABC, SBS and Fairfax Media. Tim’s expert insights have been quoted in The Australian, The Daily Telegraph, The Courier Mail and more. He regularly appears on TV and radio, and has been interviewed on 7 News, Sunrise, SBS News, ABC Local, 3AW and 5AA. Tim is passionate about simplifying complex insurance topics for Australian consumers. He holds a Bachelor of Arts (Politics) from Macquarie University and a Tier 1 General Insurance (General Advice) certification, which meets the requirements of ASIC Regulatory Guide 146 (RG146).
If you’re interested in a media interview with Tim, please reach out to our PR team at aupr@finder.com. See full bio
Tim's expertise
Tim has written 149 Finder guides across topics including:
Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio
Gary Ross's expertise
Gary Ross has written 615 Finder guides across topics including:
Insulin pumps are covered under all gold hospital policies, as well as on some Silver Plus policies. The details do differ between funds, however.
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