Navigating Private Health Insurance in Australia with a Pre-Existing Condition
Published November 28, 2025
The fact is, many people fear that their medical history may disqualify them for private healthcare or have concerns about seeing their premiums suddenly go through the roof. Fortunately, Australia’s rating system puts everyone on the same playing field: You will pay the same premium for the same level of cover, regardless of age or health status. The only cost differences are those that come down to the fund you pick.
But there are a few key things to consider around pre-existing conditions, including waiting periods and policy limitations that might affect both when you can claim and how much you’ll be out of pocket.
Will having a pre-existing condition raise my health insurance premiums?
Unlike in some countries where insurers charge higher premiums for people who have pre-existing conditions, Australian private health funds are legally prohibited from increasing your premium pricing based on your health status. The Community Rating system is enforced by the Australian government to ensure that everyone pays the same price for the same level of cover, irrespective of age, gender, pre-existing conditions, and other factors.
However, there are other ways that having a pre-existing condition can hinder your efforts around getting private health insurance.
- Waiting periods: A 12-month waiting period applies in regard to hospital cover for pre-existing conditions.
- Policy limitations: Some lower-tier policies won’t include treatments for chronic or complex conditions; this could mean you have to foot higher bills for out-of-pocket costs.
- Extras: While your extras cover is not technically affected by pre-existing conditions, you will still need to wait out the standard waiting periods for expensive treatments, such as major dental or continued physiotherapy sessions.
What waiting periods factor into pre-existing conditions
A waiting period is the time you will have to wait before claiming benefits for treatments under your health insurance policy. Insurers implement a 12-month waiting period for pre-existing conditions before they commence paying for your hospital treatments. This is the case whether you are taking out a new policy or increasing to a higher level of cover.
4 tips for managing health insurance costs with a pre-existing condition
1. Choose the right level of cover
Health insurance policies are available for different cover levels. For example, if you have a Bronze or Basic plan, then you will not be covered for treatment relating to chronic illness and major surgery, leaving you to potentially huge out-of-pocket expenses.
In contrast, the Silver and Gold policies cover a wider range of services, including treatments for conditions like cancer, joint replacements, and cardiac procedures; but the premiums are higher.
2. Work out whether you need extras
Extras cover provides you with benefits for the common allied health services, including physiotherapy, chiropractic care, dental, optical, and mental health support. Also, though pre-existing conditions do not affect your premiums here, standard waiting periods apply:
- 2 months: General dental, optical, physiotherapy, etc.
- 12 months: Major dental, hearing aids, orthodontics, etc.
If your pre-existing condition requires ongoing therapy, it’s a good idea to invest in a policy with higher extras benefits to minimize your out-of-pocket costs.
3. Choose a higher excess
Paying a higher excess-the amount you pay before the insurance actually kicks in-lowers the cost of your monthly premiums. Just remember that if you think you will be visiting the hospital quite a bit over the coming months, a lower excess might work out cheaper over the longer term.
4. Utilize government rebates
The private health insurance rebate helps offset your insurance costs. These subsidies will vary from 0% for very high earners right up to 32%, depending on your age and income. Singles earning less than $97,000 and families earning below $194,000 get the full rebate. Rebates applicable, vary based on earnings tier which includes Base, Tier 1, Tier 2, and Tier 3.
Private health insurance can still be an extremely valuable resource that offers better treatment options and a greater choice of doctors and hospitals, even if you have a pre-existing condition. Just ensure that you select the right level of cover for your needs and take advantage of rebates to help manage your costs as best you can.
Want clearer guidance on pre-existing conditions and Australian health insurance? Connect with Utility Market on LinkedIn for expert insights and smarter plan comparisons tailored to your needs.
