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Why compare Basic health insurance with Canstar?

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How to compare Basic health insurance with Canstar?

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Guide to Basic health insurance

Fact Checked

What is Basic health insurance?

Basic health insurance offers the minimum amount of hospital cover that a private health insurance policy can provide. 

Hospital cover comes in four tiers:

  1. Basic
  2. Bronze
  3. Silver
  4. Gold

‘Plus’ versions of these policies for certain tiers may offer coverage for some additional procedures. 

Basic is the entry level tier that offers the lowest amount of hospital services covered as standard and is often the most affordable.


What is covered by Basic health insurance?

The Basic tier of private hospital insurance provides you with the minimum of cover for treatment received as part of a hospital admission.

According to Private Health, there are 38 categories of treatment defined in the four-tier structure, with the minimum requirements for Basic hospital cover being:

  • Rehabilitation (Restricted): Physical rehabilitation related to surgery or illness. For example, stroke recovery and cardiac rehabilitation.
  • Hospital psychiatric services (Restricted): Treatment and care of patients with psychiatric, mental, addiction or behavioural disorders. For example, schizophrenia, depression, eating disorders, addiction therapy and post-natal depression.
  • Palliative care (Restricted): Providing quality of life care for a patient with a terminal illness, including treatment to alleviate and manage pain.

This cover will be offered on a restricted basis. This means you’ll be partially covered for hospital costs as a private patient in a public hospital, but may incur some significant out-of-pocket expenses. For example, you won’t be covered for a private room in a public hospital or any room in a private hospital. 

If you only have basic hospital cover, it’s a good idea to check with your insurer and chosen hospital for details of any fees and other charges you may incur before receiving any treatment.

If you’re signing up for a new policy, or upgrading an existing one, you need to serve waiting periods of two to twelve months before you can make any claims, depending on the condition.

You can read policy documents, such as the Private Health Information Statement (PHIS), to see what is and isn’t included in any Basic health insurance policy.


How much does Basic health insurance cost?

The cost of any Basic health insurance policy will depend on your age and healthcare needs, as well as what state or territory you live in. It’ll also depend on whether you’re single or seeking a couples health insurance or family health insurance policy, and whether you want any ‘Extras’ cover for non-hospital treatments (e.g. dental, optical, physio etc.).


Is Basic hospital cover enough to avoid the Medicare Levy Surcharge and Lifetime Health Cover loading?

The MLS is a means tested surcharge of up to 1.5% of your taxable earnings charged by the Australian Taxation Office (ATO), while the LHC refers to a loading (up to 70%) on the price of your health insurance premiums if you don’t take out private health insurance before the age of 31.

A Basic hospital cover policy can help you avoid the MLS and LHC if it’s:

  • Provided by a registered health insurer
  • Has a maximum policy excess of $750 for singles and $1,500 for couples or families.

The policy excess refers to the amount of money you pay out of your own pocket when making a claim on your insurance.


How to compare Basic health insurance

When comparing Basic health insurance policies, the best options for you may depend on how much cover you want, what features and benefits you want to access, and how much you want to pay in premiums. 

Basic health insurance policies tend to be relatively simple, offering limited hospital cover and charging fairly low premiums. However, individual insurers may offer policies with small differences in their level of cover and the features and benefits they offer compared to the premiums they charge. There may also be special deals, promotions and introductory offers that could provide extra value, depending on your household’s financial needs.

Some insurers may also offer Basic plus level of cover, which covers all of the hospital treatments of a standard Basic package, plus some extras. This could potentially be a compromise worth considering if you want more cover while keeping your insurance costs down. 

It’s important to look at each of these factors when comparing Basic health insurance policies from different insurers, to make sure you’re getting the best value for your needs. The best Basic health insurance policy for your household may not always be the best option for the next household. 

Use Canstar’s free health insurance comparison tool to quickly review and compare health insurance policies. Have a specific health need or questions about cover? Call us on 1300 383 982 to chat with one of our experts and, if you’re ready to move, sign you up.


Is Basic health insurance worth it?

This will ultimately depend on your healthcare needs and financial situation. You may consider Basic hospital cover if:

You want to avoid paying the Medicare Levy Surcharge (MLS) and/or Lifetime Health Cover (LHC) loading.


FAQs about Basic health insurance

Basic health insurance won’t cover you for any of the other 35 categories of treatment that form part of the Bronze or higher tiers of private health insurance. They include:

  • Brain and nervous system
  • Eye (not cataract)
  • Ear, nose and throat
  • Tonsils, adenoids and grommets
  • Bone, joint and muscle
  • Joint reconstructions
  • Kidney and bladder
  • Male reproductive system
  • Digestive system
  • Hernia and appendix
  • Gastrointestinal endoscopy
  • Gynaecology
  • Miscarriage and termination of pregnancy
  • Chemotherapy, radiotherapy and immunotherapy for cancer
  • Pain management
  • Skin
  • Breast surgery (medically necessary)
  • Diabetes management
  • Heart and vascular system
  • Lung and chest
  • Blood
  • Back, neck and spine
  • Plastic and reconstructive surgery (medically necessary)
  • Dental surgery
  • Podiatric surgery (provided by a registered podiatric surgeon)
  • Implantation of hearing devices
  • Cataracts
  • Joint replacements
  • Dialysis for chronic kidney failure
  • Pregnancy and birth
  • Assisted reproductive services
  • Weight loss surgery
  • Insulin pumps
  • Pain management with device
  • Sleep studies

Your health insurer may decide to include some of these other categories of treatment in certain policies, that’s where you might consider a ‘Basic Plus’ (Basic+) level of cover.

A Basic Plus policy offers extra categories of treatment, but not enough to push the policy into another tier of cover such as Bronze. You may have to pay more for a plus policy. What additional categories of treatment are offered can vary between providers so you may have to shop around to find a policy that suits your personal and healthcare needs, as well as your financial situation.

The Federal Government introduced the hospital cover tiers during its private health insurance reforms in 2019 to help make hospital cover easier to understand for Australian consumers. It requires health funds to categorise their hospital policies into four tiers: Basic, Bronze, Silver and Gold, with the option to include Plus tiers such as Basic Plus, Bronze Plus and Silver Plus.

The private health insurance rebate is an amount of money that the Federal Government may contribute towards the cost of your health insurance premiums. The rebate is income-tested, meaning your rebate will be reduced if you have a higher income, or you might not be entitled to any rebate at all.

The Federal Government introduced the private health insurance rebate in 1999 in a bid to encourage more Aussies to take out private health cover and to help relieve pressure on the public health system.

The main difference between private and public hospitals comes down to choice. 

Private patients typically have more say over their healthcare while in hospital, such as being able to choose their own hospital and doctors, have their own private room (if available) and have a shorter wait time for elective surgeries.

Public hospitals generally offer health services free of charge or at a reduced cost to Medicare-eligible patients and are subsidised by the Federal Government. Private hospitals require patients to pay for the health services they receive,  although they may be partially subsidised by Medicare.

About our health insurance experts

Mark Bristow is an experienced analyst, researcher, and producer, and was previously a Senior Finance Writer at Canstar. While primarily focused on Australian mortgage and home loan expertise, he has experience across energy, home and travel insurances. Mark has been a journalist and writer in the financial space for over 10 years, previously researching and writing commercial real estate at CoreLogic. He's also worked for the Winning Group, Expedia, and has seen articles published at Lifehacker and Business Insider. Mark has also completed RG 146 (Tier 1), making him compliant to provide general advice for general insurance products like car, home, travel and health insurance, as well as giving him knowledge of investment options such as shares, derivatives, futures, managed investments, currencies and commodities. Find Mark on Linkedin.

Jessica was previously the Finance Editor at Canstar. With more than 12 years media industry experience, Jessica has worked across a range of fintech, travel and lifestyle publications in Australia and the UK. Her work has appeared in publications including Grazia UK, Time Out, Great Barrier Reef Foundation, WIRED, Refinery29, Suncorp, Urban List and Tourism & Events Queensland. Before joining Canstar, Jessica was a Senior Communications Associate at Australian insurer Suncorp Group, covering topics from assisted relocation reform to ASX Full Year Results. Prior to this Jessica was the Brisbane Editor at independent media brand Urban List. She holds a Bachelor of Arts (Honours) in Advertising and Creative Writing from London’s Middlesex University.

Important Information

For those that love the detail

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.