Private Health Insurance in Australia: Is It Actually Worth It?

By Molly Benjamin, Founder of Ladies Finance Club

Listen to the full podcast here.

Private health insurance in Australia is one of those “adult admin” things most of us set up once, feel proud for five minutes… then never look at again. Meanwhile, premiums quietly creep up every year, your life changes, your needs change, and suddenly you’re paying for cover you’ll never use.

In this episode of Get Rich, I sat down with private health insurance expert Kat Day to answer the question everyone’s thinking (and avoiding): is private health insurance actually worth it, or is it just another bill we tolerate?

And yes, we kept it practical. Because no one has time for a three-hour insurance lecture.

Why private health insurance feels so confusing

If you’ve ever stared at a comparison page and thought, Do I need physio? Dental? Pregnancy cover? Is “gold” the best? Why does it feel like reading a foreign language?  same.

Kat called it a minefield, and she’s right. There are so many options, and the system isn’t designed to make decisions feel easy. The result is that lots of people choose something “safe”, then leave it untouched for years.

That’s where the overpaying happens.

When private health insurance is genuinely worth it

Kat’s view was clear, hospital cover has become more valuable for many Australians, especially post-COVID, because of what’s happening in the public system.

The big factor isn’t just cost, it’s quality of life. If you need a procedure and the public waitlist is long, waiting years while you’re in pain (or your life is limited) is a very different decision to “I’ll just wait my turn”.

So for many people, the real question becomes:
Would I rather pay for peace of mind and access, or risk long delays if something pops up?

Extras cover, the “it depends” category

Extras can be amazing… if you actually use them.

If you already pay for things like dental, physio, or optical, extras might help you save. But if you’re paying for a whole buffet of services you never touch, it’s basically money leaking out of your bank account each month.

Kat said one of the most common issues she sees is people being overinsured, like having pregnancy cover when they’re well past that stage of life, simply because they never reviewed their policy.

This is the moment to be honest with yourself: What do I truly use, and what am I paying for “just in case”?

Medicare Levy Surcharge, pay the levy or get the cover?

Let’s talk about the Medicare levy surcharge, because this is where private health insurance in Australia becomes less of a “choice” for some people and more of a “maths problem”.

Kat broke it down simply:

• If you’re a single earning over $101,000, you may pay an additional surcharge at tax time (up to 1.5% of your income, depending on your tier).
• Taking out hospital cover (any level, basic to gold) can help you avoid paying that surcharge.
  

And the blunt truth Kat shared is this: if you’re going to hand money over anyway, it can feel better to pay for something that gives you cover, rather than paying a levy and receiving nothing in return.

This is one of those areas where a quick check can lead to real health insurance savings, especially if you’ve been defaulting into “whatever I’ve always done”.

The “gold cover” myth that keeps people overpaying

This was one of my favourite parts of the conversation because it’s such a common misconception:

Being on gold doesn’t mean you get better treatment.

It doesn’t mean nicer doctors, faster service, or a superior hospital experience. It means you’re covered for more categories. That’s it.

So if you’re paying top-tier premiums for services you’ll never claim, you’re not getting “better value”, you’re just paying more.

Ambulance cover, the detail many people miss

This part surprised a lot of listeners, and honestly, it’s worth rereading:

Kat explained that ambulance is not automatically covered in every state.

• In Queensland and Tasmania, ambulance is covered through the government scheme.
• In other states, without the right cover, an ambulance trip can leave you out of pocket for thousands.

It’s one of those classic “you don’t think about it until you need it” costs, and it’s exactly why reviewing your policy matters.

Waiting periods, you won’t “start again” if you switch

So many people stay with a provider because they’re scared switching means they’ll lose their waiting periods.

Kat was very clear: you’re guaranteed continuity of cover.

You generally won’t re-serve waiting periods you’ve already served, which means switching is far less risky than people assume. This is a big unlock if you’ve been putting off reviewing your cover, even though you suspect you’re overpaying.

The most common way people overpay

This wasn’t about people being “bad with money”. It was about people being busy.

Kat said the biggest reason people overpay is simple:
They’re covered for things they don’t need, and they don’t review their policy as life changes.

And honestly, it makes sense. If your policy was set up in your twenties, and you’re now in your thirties with different health needs (or having a baby, or no longer needing certain services), it’s unlikely that the same cover is still the best fit.

Health insurance tips to take away from this episode

If you do one thing after reading this, make it this:

If you haven’t reviewed or negotiated your private health insurance in the last 12 months, you’re probably overpaying.

Not because you’ve done anything wrong, but because premiums rise, life changes, and insurers rarely call you to say, “Hey, want a better deal?”

The best time to review is when something shifts, a birthday with a new life stage, a new job, a baby, a move, or even just that feeling of, I don’t actually know what I’m paying for anymore.

Because money loves clarity. And your future self will absolutely thank you for this one.

This episode wasn’t about convincing everyone they need private cover. Kat was clear that sometimes it’s not worth it, and the right decision depends on your life, your needs, and your budget.

But it was a reminder that the costliest option is often the one we never question.

And if you do end up reviewing your policy and finding health insurance savings, please tell me. I get an embarrassingly large kick out of hearing how much our community saves.

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