How well do Australian’s know about tiered private hospital insurance system?

13% said the tier system is as confusing as the previous insurer-specific policies.

Five years after the mandatory tiered private hospital insurance system was introduced, most Australians still do not fully understand how it works, according to new research by Money.com.au.

Over half of Australians with private health insurance only somewhat understand the product tiers Basic, Bronze, Silver, and Gold.

Whilst 13% say the tier system is as confusing as the previous insurer-specific policies.

The tier system was introduced in April 2020 to make private health insurance easier to navigate. 

Each tier includes a minimum set of hospital treatments to allow for clearer comparison between health funds. 

However, according to Money.com.au general manager of Health Insurance Chris Whitelaw, the system has not delivered on its promise of simplicity.

Whitelaw said many people are paying thousands of dollars annually in premiums without fully understanding what their cover includes or excludes. 

He added that confusion is particularly high around ‘Plus’ policies, which offer additional coverage beyond the standard tier requirements but vary significantly between insurers.

The survey also revealed Millennials had the highest self-reported understanding of the tier system at 36%, followed by Boomers at 30%. 

Gen X reported the lowest understanding at 26%, with Gen Z slightly higher at 29%. Overall, only 31% of respondents said they easily understand the system.