Our insurance experts reviewed all the Basic health insurance policies available in Australia to find the cheapest ones to suit people who have health insurance for tax reasons.
With the cost of living steadily rising and incomes not keeping pace, you might think about downgrading your health insurance. If you decide you don't need cover but want to avoid extra tax due to earning over $97,000 or $194,000 for couples, single parents and families, these policies may be an option for you.
Check our advice on health insurance financial incentives below to see what impact they may have on your tax bill.
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What does Basic hospital insurance cover?
Basic hospital insurance policies offer the lowest tier of health cover at the lowest price point. All Basic policies must cover treatment in a public hospital for palliative care, rehabilitation and psychiatric care.
These policies are good for avoiding tax and loadings, but they provide very little cover, so we don't recommend them for health cover.
There are two types of Basic policies: accident policies and public hospital policies.
Accident policies
These cover accidents and ambulance. As a government requirement, they also must cover rehab, palliative care and psychiatric care in a public hospital – which means nothing more than you can choose your own doctor. And regardless of your cover, it's very hard to get a place in a public hospital for these services. All other services and illnesses are excluded.
Accident policies can also have restrictions. For example, HCF's Accident Only policy covers you for the initial treatment if you go to emergency within 24 hours after the accident, but you're not covered for any follow-up treatment.
Public hospital policies
These provide cover in a public hospital only. The only difference between this cover and what you get under Medicare is that you can choose your own doctor. You'll still have to join public hospital waiting lists, and generally, you get the same treatment as public patients.
If you want a higher level of hospital cover, look for Bronze, Silver or Gold hospital insurance.
Cheapest health insurance policies to save on tax
(Hot tip: Don't rely on them for health cover).
The cheapest hospital insurance in the Australian Capital Territory and New South Wales is see-u (by HBF) Starter Hospital (Basic) $750 excess.
The cheapest hospital policy in Victoria, the Northern Territory and South Australia is HCF Accident Only Basic with a $750 excess.
The cheapest hospital policy in Tasmania is Health Care Insurance Basic Plus Hospital with a $750 excess.
The cheapest hospital cover in Queensland is Westfund Basic with a $750 excess.
The cheapest policy in Western Australia is AIA Basic Accident Only Hospital with a $750 excess.
How much do the cheapest Basic policies cost?
The government's private health insurance rebate, which is based on your income, affects how much you'll pay for a health insurance policy.
We've compiled annual premiums for the cheapest policies in each state, with the rebate applied for a range of incomes.
See-u by HBF Starter Hospital Basic ($750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$924 |
| $97,000–113,000 |
$1025 |
| $113,000–151,000 |
$1125 |
| >$151,000 |
$1226 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium
cost.
Cover: Provides private hospital cover for treatment within 90 days after an accident. You need to visit your doctor or go to emergency within 48 hours. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital. Also provides emergency ambulance cover (as do all ACT/NSW hospital policies).
Risks: No cover for other services.
Recommended for health cover? No.
HCF Accident Only ($750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$344 |
| $97,000–113,000 |
$381 |
| $113,000–151,000 |
$419 |
| >$151,000 |
$456 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
Cover: Provides emergency ambulance cover and private hospital cover for
the initial treatment after an accident if you go to emergency within 24
hours after an accident. Covers rehab, psychiatric in-hospital treatment
and palliative care in a public hospital.
Risks: No cover for follow-up treatment after an accident and no cover for
other services.
Recommended for health cover? No.
Westfund Basic ($750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$868 |
| $97,000–113,000 |
$962 |
| $113,000–151,000 |
$1056 |
| >$151,000 |
$1151 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
Cover: Does not provide any cover in private hospital, but covers a range of services in public hospital. Emergency ambulance is covered by the Queensland government.
Risks: You have to serve public hospital waiting lists and may receive the same treatment as public patients.
Recommended for health cover? No.
HCF Accident Only Basic ($750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$860 |
| $97,000–113,000 |
$954 |
| $113,000–151,000 |
$1048 |
| >$151,000 |
$1141 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
Cover: Provides emergency ambulance cover and private hospital cover for the initial treatment after an accident if you go to emergency within 24 hours after an accident. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital.
Risks: No cover for follow-up treatment after an accident and no cover for other services.
Recommended for health cover? No.
HCI Basic Plus Hospital ($750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$950 |
| $97,000–113,000 |
$1053 |
| $113,000–151,000 |
$1157 |
| >$151,000 |
$1260 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
Cover: Provides private hospital cover for treatment after an accident. Covers rehab, psychiatric in-hospital treatment, palliative care, blood disorders and sleep studies in a public hospital. Emergency ambulance is covered by the Tasmanian government.
Risks: No cover for other services.
Recommended for health cover? No.
HCF Accident Only Basic ($750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$916 |
| $97,000–113,000 |
$1015 |
| $113,000–151,000 |
$1115 |
| >$151,000 |
$1214 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
Cover: Provides emergency ambulance cover and private hospital cover for the initial treatment after an accident if you go to emergency within 24 hours after an accident. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital.
Risks: No cover for follow-up treatment after an accident and no cover for other services.
Recommended for health cover? No.
AIA Basic Accident Only hospital ( $750 excess)
| Your annual income |
Annual premium |
| <$97,000 |
$703 |
| $97,000–113,000 |
$779 |
| $113,000–151,000 |
$856 |
| >$151,000 |
$932 |
The annual premium is after the private health insurance rebate has been applied. These premiums are for a single policy. For couple and family policies, double the earning figures and annual premium cost.
Cover: Provides private hospital cover for treatment after an accident. You need to visit your doctor or go to emergency within 48 hours. Covers rehab, psychiatric in-hospital treatment and palliative care in a public hospital. Also provides emergency ambulance cover.
Risks: No cover for other services.
Recommended for health cover? No.
What are the different levels of health cover?
- Basic covers very little, if anything, in a private hospital. Basic policies only cover rehab, palliative care and in-hospital psychiatric treatment in a public hospital; some also cover treatment after an accident, but often don't cover follow-up care.
- Bronze offers low cover but includes thousands of treatments such as surgery for breast, skin and prostate cancer; miscarriage and abortion; broken bones and stroke.
- Silver is medium-level cover and includes all Basic and Bronze services and additional high-cost treatments such as heart attack, lung cancer surgery and bone marrow transplants.
- Gold covers all treatments in a private hospital, for example, rehabilitation, hip/knee replacements, cataract eye surgery, and pregnancy and fertility treatments.
Basic Plus, Bronze Plus and Silver Plus policies will cover at least one service more than normal Basic, Bronze or Silver policies.
Financial incentives for health insurance
The government has come up with a few carrots (or are they sticks?) to encourage people to have private health cover, depending on your age and income.
Lifetime Health Cover
For every year you don't have hospital insurance on 1 July following your 31st birthday, you'll pay a Lifetime Health Cover (LHC) loading of 2% of your hospital cover premium up to 70% (extras cover isn't needed). After 10 years of continuous cover the loading will be removed. Here's how you can pay the LHC loading and save.
Medicare Levy Surcharge
A 1% tax applies on your income in the 2024/25 financial year if you don't have hospital insurance and you earn more than $97,000 as a single (or $194,000 for couples and families). If you earn more than $113,000, you pay 1.25% and if you earn more than $151,000, you pay 1.5%. If you take out hospital insurance, you're exempt from the tax, and in many cases it's cheaper to pay for hospital insurance than to pay the tax.
Private health insurance rebate
You get a 24.6% rebate on your private health insurance premium in the 2024/25 financial year if you earn up to $97,000 a year as a single (or $194,000 for a couple or family). For singles earning above $97,000, the rebate steps down incrementally until it reaches 0% for people earning over $151,000 (or families or couples earning over $302,000). Often health funds deduct the rebate directly from the premium, otherwise claim it at tax time.
Stock images: Getty, unless otherwise stated.
