A qualitative study was conducted to explore in-depth issues relating to the health costs of chronic illness as identified in a previous study. A key theme that emerged from interviews carried out was the benefits and challenges of private health insurance (PHI) membership, and choices older Australians with multimorbidity make in accessing health services, with and without PHI. This is the focus of this paper. Semistructured interviews were conducted with 40 older people with multiple chronic conditions. Data were analysed using content analysis. Key motivators for maintaining PHI included: fear of an inability to access timely health care; the opportunity to exercise choice in service provider; a belief of being 'better off' both medically and financially, which was often ill-founded; and the core values of self reliance and independence. Most described financial pressure caused by rising PHI premiums as well as other out-of-pocket health related expenses. Many older people who can ill afford PHI still struggle to maintain it, potentially at the cost of their quality of life, based on beliefs about costs of health care that they have never properly assessed. The findings highlight the degree to which people whose resources are constrained are prepared to go to maintain access to private hospital care. Attention should be given to assisting older people to make informed and valid choices of health insurance derived from the facts, rather than being based on fear and assumptions.