Australian families avoid private hospital insurance use over high gap fees

17% of couples and 15% of singles reported doing the same.

A fifth of Australian families with private hospital insurance have avoided using their cover due to high out-of-pocket costs, the highest rate amongst policyholders, revealed a Money.com.au survey.

In comparison, 17% of couples and 15% of singles reported doing the same.

Families were also the least likely to use their insurance when medical care was needed, with only 43% proceeding with a claim, compared to 44% of singles and 64% of couples.

The report attributes this trend to families’ greater exposure to potential claims, including childbirth and childhood-related procedures, leading to higher accumulated gap fees.

The survey, conducted in March 2025 with a nationally representative sample of 1,000 Australians, also showed that 20% of singles avoided hospital claims due to uncertainty over what their policy covered, compared to 12% of families and 9% of couples.

Chris Whitelaw, general manager of Health Insurance at Money.com.au, noted that whilst families face greater financial exposure, many may be unaware of ways to reduce costs, such as using no-gap providers or agreement hospitals.