Hospital Cover Explained
Australian hospital cover comes in four government-defined tiers — Basic, Bronze, Silver, and Gold. Here's what each one covers and who it suits.
The Four Hospital Cover Tiers
Basic
Minimum compliance cover. Covers a very limited range of services including psychiatric care, rehabilitation, and palliative care.
Who it suits: People who just want MLS exemption at the lowest price.
Bronze
Covers 18+ treatment categories including bone, joint, heart, and gynaecology. More comprehensive than Basic, still affordable.
Who it suits: Young people and those wanting solid everyday cover without the gold price.
Silver
Covers most treatment categories. A popular middle-ground that suits most Australians.
Who it suits: Families and individuals who want broad protection without paying for everything.
Gold
Covers all clinically recognised treatments including IVF, joint replacements, weight loss surgery, and more.
Who it suits: Those who want complete peace of mind and use private health regularly.
What Is Hospital Cover?
Hospital cover (also called private hospital insurance) pays for some or all of your costs when you are treated as a private patient in hospital. This includes your accommodation, theatre fees, and some medical costs. It gives you the right to choose your own doctor and avoid public hospital waiting lists for elective procedures.
Excesses and Co-payments
Most hospital policies include an excess — an amount you agree to pay towards your hospital stay before your fund covers the rest. Common excess levels are $250, $500, and $750 per person, or $500/$1,000 per couple or family per year. A higher excess means a lower premium. Co-payments are a fixed amount per day in hospital, though these are less common in newer policies.
What's NOT Covered by Hospital Cover?
Hospital cover does not pay for: dental, optical, physiotherapy, ambulance (in most states), or general GP visits. These are covered by extras cover or Medicare. You'll also need to check whether your specific doctor or specialist charges above the Medicare Benefits Schedule (MBS) rate, as out-of-pocket ‘gap’ fees may still apply.
The Medicare Levy Surcharge (MLS)
If you earn over $101,000 as a single (or $202,000 as a family) and don't have hospital cover, you pay the Medicare Levy Surcharge — an extra 1%–1.5% tax on top of the standard 2% Medicare Levy. For many higher earners, an entry-level hospital cover policy is actually cheaper than the surcharge, making it a straightforward financial decision. Thresholds are for the 2025–26 income year and are indexed annually.
Lifetime Health Cover (LHC) Loading
If you don't take out hospital cover by July 1 following your 31st birthday, you'll pay a 2% loading on your premium for every year you delay — up to a maximum of 70%. The loading remains for 10 consecutive years of hospital cover before it's removed. It pays to get covered sooner rather than later.