Whilst medicare applies and as pointed out by kpc a medivac to the mainland if needed, the one thing no domestic travel insurance (or medicare) would cover is domestic borders slamming shut.
There is a very slim risk that if an outbreak occurs on the island you'd be forced to stick out a lockdown (paying for your own accommodation) or return to the mainland and enter hotel quarantine (and pay for it yourself). No insurance will cover this and it's a risk that could occur traveling interstate anywhere in Australia right now. I'd argue with Norfolk Island the risk is less than a capital city as any case would need to be imported via the mainland (and previously leaked out of hotel quarantine). The island has never had a single confirmed case so all this above would be extremely unlikely but again possible just very very slim (although I can't say it enough traveling interstate anywhere has the exact same risk right now!).