• Private Health Insurance System
• Understanding Healthcare Jargon
• Understanding Private Health Insurance Premiums
• Frequently Asked Questions
• The Gap – It is Your Right to Know
• Informed Financial Consent

Private Health Insurance System

Private health insurers and Medicare work in tandem to give us our current health care system.  You can choose to take out private health insurance to give you more options to cover services which are not covered by medicare. Among the benefits of this are shorter waiting times for elective surgery and less demand for public hospital beds.

What does Medicare cover?

Medicare is the basis of Australia’s health care system and covers many health care costs. You can choose whether to have Medicare cover only, or a combination of Medicare and private health insurance. Citizens and most permanent Australian residents are eligible for Medicare.

• As a public patient, you cannot choose your own doctor and you may not have a choice about when you are admitted to hospital.
• You can be treated as a public patient in a public hospital by a doctor appointed by the hospital. As a public patient you will be treated at no charge.
• You can choose to be treated as a public patient even if you are privately insured.

Medicare does not cover:

• private patient hospital costs (for example, theatre fees or accommodation),
• medical and hospital costs incurred overseas,
• medical and hospital services which are not clinically necessary, or surgery solely for cosmetic reasons. 

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 (may be available separately, combined with other policies, or in some cases is covered by your state government). Each policy is different and will vary on what and when you can claim for benefits so talk to your health fund for more information on what is covered under your policy to ensure you are covered for the services you need.

What may not be covered by Private Health Insurance?

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.
• 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 InsuranceAct 1973 does not allow health funds to insure for this cost.

What is Hospital Cover?

Hospital policies help cover the cost of in-hospital treatment by your doctor and hospital costs such as accommodation and theatre fees. Generally, any medical services listed under the Medicare Benefits Schedule (MBS) can be covered on some form of private hospital insurance. Some services which are not listed on the MBS, such as elective cosmetic surgery or laser eye surgery, are only covered by private hospital insurance to a limited extent or not at all.

• 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.
• You may also have more choice as to when you are admitted to hospital.
• When you are admitted to hospital, you can choose to be treated under either the public Medicare system or in the private system
• 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.
• You will be charged the remaining 25% of the MBS fee for doctors’ services and any amount above the MBS fee they 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.

Hospital policies fall into four general categories:

• Top Private Hospital Cover – must cover all services where Medicare pays a benefit
• Medium Private Hospital Cover – excludes or restricts one or more of the following but includes any services in the basic classification: Pregnancy and birth related services, Assisted reproductive services, Cataract and eye lens procedures, Joint replacements i.e. shoulder, knee, hip and elbow including revisions, Hip and knee replacements, Hip replacements, Dialysis for chronic renal failure and Sterilisation
• Basic Private Hospital Cover – excludes or restricts one or more of the following: Cardiac and cardiac related services, Non-cosmetic plastic surgery, Rehabilitation, Psychiatric services, Palliative care
• Public Hospital Cover - covers default benefits for treatment in public hospital only.

What is covered under General Treatment Services?

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,
• podiatry,
• physiotherapy, occupational, speech and eye therapy,
• glasses and contact lenses,
• prostheses (e.g. hearing aids).

General treatment policies may be offered separately or combined with hospital cover. There are three general categories of policies. The classifications are based on the services that are shown as covered on standard information statements.

• Comprehensive Cover – must include cover for General dental, Major dental (benefit limit must be average or above average for the industry), Endodontic, Orthodontic (benefit limit must be average or above average for the industry), Optical, Non-PBS Pharmaceuticals, Physiotherapy, Podiatry, Psychology; 
• Medium Cover – must include cover for General dental, Major dental, Endodontic AND any five of the following: Orthodontic, Optical, Non-PBS Pharmaceuticals, Physiotherapy, Chiropractic, Podiatry, Psychology, Hearing Aids; 
• Basic Cover – all other policies.

 What may not be covered under General Treatment Services?

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.

 Ambulance

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.

Combined Cover

Many health funds offer packaged policies that provide cover for both hospital and general treatment services. Some funds have pre-packaged policies, while others allow you to mix and match hospital and general treatment options. For example, you may be able to select a basic hospital cover and a comprehensive general treatment policy to create your own combined package.