Frequently Asked Questions

    Understanding how your private health Insurance benefits you is important, so we have put togetehr some frequently asked questions to help you understand the private healthcare system.
  1. What is Private Health Insurance?
  2. What are the benefits of Private Health Insurance?
  3. What does private health insurance cover me for?
  4. What doesn’t private health insurance cover?
  5. Am I covered as soon as I take out private health insurance?
  6. Am I covered for a condition that I had before I took out private health insurance?
  7. Does my income affect whether or not I have to have private health insurance?
  8. Can I still access Medicare if I have private health insurance?
  9. Can a Health fund refuse to insure me because I am elderly or chronically ill?
  10. Why do I have to pay the Medicare Levy when I have private  health insurance?
  11. Why are there waiting periods for new members?
  12. Can I change the level of health cover I have?

1.What is Private Health Insurance?

You may purchase private health insurance to cover all or some of the costs of health care as a private patient. There are two types of private health insurance cover available: hospital cover and general treatment cover (ancillary or extras cover).
Hospital insurance covers all or some of the costs of hospital treatment as a private patient including doctor’s charges and hospital accommodation. This applies when you are a private
patient in a public or private hospital or day hospital facility.
General treatment cover helps with the cost of non-medical services such as physiotherapy, dental and optical treatment. Some funds offer packaged products that cover both hospital and general treatment services.
Generally, the more extensive the health cover, the greater the premium cost. When choosing your private health insurance, it is important to make sure it suits your particular needs, as well as your budget. Insurers should provide you with the information to make an informed choice about a private health insurance cover that is appropriate for you.

2.What are the Benefits of Private Health Insurance?

Private health insurance allows you to be treated in a private or public hospital as a private patient. This means that you may be able to choose the doctor that treats you, the hospital you are treated in and a time for treatment that suits you. Private health insurance also provides cover for services not covered by Medicare such as physiotherapy, dental, optometry and podiatry services. Many people rely on private health insurance to access services they would otherwise be unable to afford.
The decision to purchase private health insurance is a personal choice. People who cannot afford the premiums for private health insurance or do not wish to take out private health insurance for any other reason, continue to have the right to access the public hospital system through Medicare on the basis of clinical need.

3.What does private health insurance cover me for?

If you purchase hospital cover with a private health insurer, you will be covered for some or all of the costs of being a private patient in either a public or private hospital. Alternatively,
you can still be treated as a public patient in a public hospital at no charge to you under Medicare, should you wish.
The exact amount of hospital treatment you are covered for depends on the level of hospital cover that you purchase, as well as the hospital and doctor you choose and whether they have an
agreement with your insurer.
You can also purchase general treatment cover (also known as ancillary or extras cover) that may offer you cover for services out of hospital that are generally not funded by Medicare, such as:
  • dental treatment
  • ambulance
  • chiropractic treatment
  • home nursing
  • podiatry
  • physiotherapy
  • occupational therapy
  • speech therapy
  • glasses and contact lenses

4.What doesn’t private health insurance cover?

Private health insurance does not cover medical services that are provided out of hospital and which are covered by Medicare. These services include GP visits and consultations with specialists, in their rooms, and diagnostic imaging and tests.
Private health insurance may not cover the total cost of the doctors’ services provided to you in hospital, which in turn may leave you with an out of pocket expense. This out of pocket expense is referred to as a ‘gap’.
Individual health funds can inform you whether they offer a product that covers you for all or part of the gap, and will provide details of the doctors and hospitals with which they have agreements to cover the gap. You can check with your health fund to see what it offers.

5. Am I covered as soon as I take out private health insurance?

When you join a health fund or increase your level of cover you may have to wait some time before you are able to claim benefits.
This waiting period protects you and others in your health fund by making sure that people can not join a health fund solely for the purpose of making a claim, and then dropping their cover. This type of “hit and run” behaviour results in increased premiums for everyone.

6. Am I covered for a condition that I had before I took out private health insurance?

If you were ill before you took out private health insurance, you will have to serve a pre-existing ailment waiting period before you are covered for treatment associated with your illness. This waiting period is usually 12 months, however, you should check this with your fund.

7. Does my income affect whether or not I have to have private health insurance?

No, the decision to purchase private health insurance is entirely up to you. However, if you are eligible for Medicare, and you earn an annual income in excess of $77,000 for singles and in excess of $154,000 for couples/families (with family income being adjusted by $1,500 per annum for each child after the first), you will be required to pay the Medicare Levy Surcharge
if you do not have an appropriate level of private health insurance. This Medicare Levy Surcharge is 1% of your income.

The surcharge is administered by the Australian Taxation Office http://www.ato.gov.au.

8. Can I still access Medicare if I have private health insurance?

Yes, even if you have private health insurance you are able to access the public hospital system through Medicare and be treated as a public patient in a public hospital under Medicare at no
charge, should you wish to do so.

9. Can a health fund refuse to insure me because I am elderly or chronically ill?

No. Health funds are not allowed to refuse membership to people on the grounds of health status, age or claims history and must charge everyone the same premium for the same insurance policy. Health funds can impose waiting periods for pre-existing ailments.

10. Why do I have to pay the Medicare Levy when I have private health insurance?

The Government supports universal access by all Australians to public health services under Medicare, irrespective of private health insurance  status. People with private insurance can therefore choose to use Medicare or private hospital services depending upon their particular  health needs.
In addition, privately insured patients using private hospital services still draw substantially upon Medicare as well their insurance. For example, Medicare funds 75% of the Medical Benefits Schedule (MBS) fee for privately insured in-hospital medical services and also funds 85% (MBS) rebate on out-of-hospital medical services (e.g. GP visits) for all Australians and the Pharmaceutical Benefits Scheme (which subsidises  the costs of pharmaceuticals).
Health insurance benefits may also not cover the total cost of hospital treatment, which in turn can result in an out-of-pocket expense. This out-of-pocket expense is referred to as a gap.

11. Why are there waiting periods for new members?

When you join a health fund or increase your level of cover you may have  to wait some time before you are able to claim benefits. This waiting period protects you and others in your health fund by making sure that  people can not join a health fund solely for the purpose of making a claim, and then dropping their cover. This type of “hit and run” behaviour results in increased premiums for everyone.

12.Can I change the level of cover I have?

Yes. You can change insurance policies at any time. However, if you change to a higher level of cover you may have to serve a waiting period  before you can claim benefits at this higher level. This includes transferring to policies with lower excesses or co-payments.



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