What is covered by private health insurance in Australia?
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 ‘community-rated’, rather than ‘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.
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 have the following treatment options:
|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|
Generally, any medical services which Medicare covers and are listed under the Medicare Benefits Schedule (MBS) can also be covered to some extent by private hospital insurance. 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 may not be covered at all, depending on the policy.
What is covered by private hospital policies?
Every health insurer offers policies with different levels of cover. Generally, the more expensive policies cover a wider range of services, while the lower cost policies will limit what services will be covered in a private hospital.
Four new tiers of hospital cover began rolling out from 1 April 2019 and will become mandatory from 1 April 2020. All hospital insurance policies will be classified as Gold, Silver, Bronze or Basic.
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.
- 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. Health insurance regulations do not allow health insurers 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 insurer’s benefit and the hospital’s charge. Your health insurer 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 therapy, speech therapy 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.
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 cover, or as a stand-alone cover.
The options for ambulance cover vary depending on what state or territory you live in.
Broader Health Cover
Private health insurers can cover a wide variety of clinically appropriate alternatives to hospital treatment. This can include treatment provided in your own home or in community healthcare clinics (known as hospital substitute treatment), as well as programs to manage or prevent chronic disease.
It is not mandatory for health insurers to offer cover for these services. Participation in these programs may be subject to your level of cover and eligibility criteria, so check with your insurer for more information.
Common examples of hospital substitute treatment include:
- wound care;
- IV therapy; and
- early discharge.
Common examples of chronic disease management include:
- heart/cardiovascular health;
- risk factors for chronic disease; and
- diabetes management/education.