What is covered by private health insurance?
Private health insurance cover is generally divided into hospital cover, general treatment cover (also known as ancillary or extras cover) and ambulance cover. Ambulance cover may be available separately, combined with other policies, or in some cases is covered by your state government.
In Australia, private health insurance is not 'risk-rated' like most forms of insurance. Private health insurers cannot refuse to insure any person, and must charge everyone the same premium for the same level of cover, despite their risk profile and likelihood of using health services.
There are different types of cover that offer different benefits. Check with your health fund to be sure of exactly what you are covered for.
With hospital cover you have the right to choose your own doctor, and decide whether you will be treated at a public or a private hospital that your doctor attends. If you are a private patient at a private hospital, you may also have more choice as to when you are admitted to hospital. If you are a private patient in a public hospital, public hospital waiting lists still apply.
When you are admitted to hospital, you can choose to be treated under either the public Medicare system or in the private system:
|Accommodation Type||Choice of hospital||Choice of doctor|
|Public patient, public hospital||No||No|
|Private patient, public hospital||No||Yes|
|Private patient, private hospital||Yes||Yes|
Private health hospital cover insures you against some or all of the additional costs of being a private patient in either a public or private hospital. Medicare will cover 75% of the Medicare Benefits Schedule (MBS) fee for associated medical costs. Provided you have the appropriate private health insurance policy, your health fund will cover the remaining 25% of the MBS fee.
You will be charged any amount above the MBS fee the doctors have chosen to charge. Depending on the extent of your private cover, you may also be charged for some or all the costs of hospital accommodation, theatre fees, intensive care, drugs, dressings and other consumables, prostheses (surgically implanted), diagnostic tests, pharmaceuticals, and any additional doctor's fees.
Some funds also offer 'gap cover' to cover some or all of the difference between the doctor's fee for services provided in hospital and the combined Medicare benefit and health insurance benefit. Some also provide cover for alternatives to hospital treatment known as Broader Health Cover.
As with any other insurance policy, you can manage your cover by choosing comprehensive cover with higher premiums, or pay lower premiums for reduced cover. You can also reduce your premiums by opting to pay some of the costs through an excess or co-payment.
What may not be covered?
The health insurance policy you buy will have some limitations on hospital treatment, which might include:
- Exclusions - specific services that are not covered at all.
- Restrictions - services that are covered to a limited extent, which means you will have greater out-of-pocket expenses. Restricted benefits are not sufficient to cover the full hospital cost of a private hospital admission and you will need to pay for the difference in cost.
- Benefit limitation periods - which pay reduced benefits on one or more services for a set period of time after the waiting period, then pay full benefits after this period.
- Surgery or hospital treatment that Medicare does not pay a benefit for - Medicare pays a benefit on all medical services necessary to maintain your health, but does not cover optional treatments such as elective cosmetic surgery.
- Long stay patients - If you are in hospital for more than 35 days in succession, you will be regarded as a long stay or nursing home type patient, unless your doctor specifies otherwise. This means you will have to pay more for the cost of hospital accommodation after the initial period. The Health Insurance Act 1973 does not allow health funds to insure for this cost.
- Single vs shared rooms – some hospital policies cover the full cost of a shared room, but not a single room. Depending on your policy, this limitation can apply in a private hospital, or a public hospital, or both. If you are admitted to a single room and your policy does not fully cover the cost, the hospital should inform you that you will need to pay the difference between the fund’s benefit and the hospital’s charge. Your health fund can also provide more information about your cover.
General Treatment Cover
General treatment cover (also called ancillary cover or extras cover) provides insurance against some or all costs of treatment by ancillary health service providers. The extent of your cover depends on the type of policy you select and may include services such as:
- dental treatment;
- chiropractic treatment;
- home nursing;
- physiotherapy, occupational, speech and eye therapy;
- glasses and contact lenses; and
- prostheses (e.g. hearing aids).
What may not be covered?
Nearly all services covered under general treatment are only covered to a limited extent. There are various limits that may apply, for example a limit per service, per year, or lifetime limits. Some services may not be covered at all.
You should check the Standard Information Statement about any policy you are interested in, and seek information from your insurer for details of these limitations.
Medicare does not cover the cost of emergency or other ambulance services. You can organise cover for this service as part of your hospital or general treatment plan, or as a stand-alone cover.
The options for ambulance cover vary depending on what State you live in. For further information please see the Ambulance section of the website.