Health Insurance Waiting Periods

What are health insurance waiting periods?

A health insurance waiting period is the period of time at the start of your membership before you can claim  some benefits and services of your policy¹. The period of time you will wait will depend on the procedure, type of cover (like extras cover or hospital cover), and your health fund.

Let’s say you’re looking to start getting regular dental checkups. You might take out extras cover to help pay for these checkups. But before you can start to claim these benefits, you’ll likely need to wait an average of two months. Now let’s imagine you need a more complicated dental procedure, like braces or a crown. The waiting period for a service like this can usually be at least 12 months.

Why do insurers have waiting periods?

In Australia, it’s illegal for insurers to charge you a higher premium because you’re more likely to need a procedure². But if everyone only signed up for private health care when they required a serious treatment, health insurance premiums would go through the roof. To keep costs low for everyone, providers use waiting periods to encourage consumers to purchase private insurance before they actually need it.

When do waiting periods apply?

Generally, signing up for new cover or increasing your level of cover will trigger the start of the waiting period for the additional items covered.

How long is a waiting period?

The answer will depend on your insurance provider, as well as the type of cover. For hospital cover, the government has set maximum waiting periods that health insurers are allowed to apply to your plan. Let’s take a look at those maximum waiting periods.

Waiting periods for hospital cover:

These are the maximum waiting periods insurers can ask you to wait before receiving different types of hospital cover.

• 12 months for pre-existing conditions: defined as conditions, illnesses and ailments that you’d had signs or symptoms of for the 6 months before your policy started.
• 12 months for pregnancy cover (obstetrics): to be covered, you must be admitted to the hospital after the 12 months waiting period.
• 2 months for psychiatric care, rehabilitation, and palliative care, even for a pre-existing condition.
• 2 months for new conditions and accidents.

Waiting periods for extras cover:

For care that falls under extras cover, like dental care or visits to the physio, waiting periods are decided by health insurance providers. These are some typical waiting periods for extras cover²:

• 2 months for general dental benefits and physiotherapy
• 6 months for optical items, like glasses or contact lenses
• 12 months for major dental procedures, like crowns or bridges
• Up to 3 years for some high cost procedures such as braces and other orthodontics

Some providers will even have no waiting periods for certain treatments, which means you can start using your benefits straight away. For example, some insurers won’t make you wait for treatments like a dental checkup.

Helpful Tip: Many policy holders stick with an outdated or expensive policy because they mistakenly believe they’ll need to re-serve any hospital benefit waiting periods if the switch to a different fund. The good news is that this simply isn’t true. Any hospital waiting periods you’ve already served will be protected by law as long as you switch to any equal or lower level of cover, and funds generally honour extras waiting periods too. If you are a new customer or upgrading your level, keep an eye out for special offers from funds to waive waiting periods. Remember, if you want to be covered for a private birth (which may also include wanting a private room and better accommodation and facilities), make sure that you are covered for a full 12 months before the baby is born. Sarah McKay, Neuroscientist, author, speaker, & media personality.

What if I go to the hospital before my waiting period is up?

In a perfect world, you might never need to visit the hospital before your waiting period was up. But if you do need to go to hospital, the Private Health Insurance Ombudsman recommends that you contact your health insurance provider straight away to check if you are entitled to hospital benefits². Your insurer should:

• Give you some information about the pre-existing conditions that apply to your policy.
• Send you documentation to the hospital that doctors will complete and return.
• Get their health fund doctors to look at the information provided by your specialist to deem whether the condition is pre-existing.
• Contact you within five days with a decision on whether the condition is deemed a new condition where benefits are payable or advise that you will not be covered for the admission and treatment if the condition is pre existing.

 It is worth noting that if you need to receive urgent care, you might not hear back from your insurer before you are admitted for treatment. 

What happens if I suspend my policy?

You may be able to suspend your local health insurance if you’re travelling overseas. This might be appealing to those looking to save money while outside of Australia, but keep in mind that the days you suspend your cover won’t be counted toward your waiting period. Once you resume your policy in Australia the waiting period clock continues.

Can I get health insurance with no waiting period?

Pretty much every health insurer will have waiting periods, but there can be  a few ways to avoid them when signing up to a new provider if you already have coverage.

If you switch from your current private health insurance plan to a new one, you might not have to serve another waiting period. In fact, if there was no gap in your coverage, and your new plan offers the same or fewer benefits as the old one, your new insurer is required to honour the waiting period for hospital cover that you’ve already served². However, if you’re upgrading your plan or switching to a provider with more benefits such as a lower excess, you can be asked to serve another waiting period for the new benefits.

For extras cover, many insurers will choose to honour your old waiting periods, even though they’re not required to do so by law. But if you’ve accrued benefits or loyalty limits, those might not transfer over to your new plan³.

You could also be able to avoid waiting periods by keeping an eye out for insurers who may offer to waive waiting periods for new customers. These promotions may be limited time offers.

How can I find a fund with the shortest waiting periods?

The best way to find a new health insurance provider with a shorter waiting period is to compare your options. Use our online Comparison Tool to see how providers stack up when it comes to waiting periods, plus other key features and benefits that are important to you.

Sources:
1. https://moneysmart.gov.au/health-insurance
2. https://www.ombudsman.gov.au/__data/assets/pdf_file/0017/35612/Waiting-periods-DL-Fyler-Web.pdf
3. https://www.ombudsman.gov.au/__data/assets/pdf_file/0020/29423/Right-to-Change-DL-Fyler-Web.pdf

Last updated: 23/11/2020