Pre-Existing Conditions And Health Insurance Explained

What is a pre-existing medical condition?

A pre-existing condition is any ailment, illness or condition of which you had signs or symptoms during the six months prior to joining a health insurance policy (or upgraded to a higher level of hospital cover)¹.

What if your pre-existing condition hadn’t been diagnosed when you joined your health fund?

The condition doesn’t need to have been previously diagnosed by a doctor, nor is it necessary for you to have been aware of it¹. A condition can be classified as pre-existing even if you hadn’t seen a health professional about it before you joined or upgraded your health insurance policy¹.

How do health insurers assess pre-existing conditions?

If your health insurer needs to decide whether or not your condition is pre-existing, they will appoint their own medical practitioner to assess the condition¹. It’s this practitioner who’ll decide if your condition is pre-existing, not your treating doctor.

However, the practitioner will have to take into account any information provided by your doctor regarding signs and symptoms of the condition.

In deciding whether your condition is pre-existing, the health fund appointed practitioner needs to be satisfied that there’s a direct link between the ailment, illness or condition requiring hospital treatment, and the signs and symptoms you experienced in the six months prior to joining or upgrading your hospital cover².

As the assessment process can take some time, it’s important to ensure you’re covered before going to hospital¹.

How will a pre-existing condition affect your health insurance policy?

Under the Private Health Insurance Act 2007, health insurers can impose a 12 month waiting period on benefits for hospital treatment for pre-existing conditions³.

Once you’ve been on your hospital cover policy for a continuous period of 12 months, the pre-existing condition waiting period will no longer apply, and you’ll now be eligible to receive the full benefits available under your policy².

Why is there a waiting period for pre-existing conditions?

Without a waiting period for pre-existing conditions, there’d be nothing preventing someone from taking out hospital cover only when they felt they would need hospital treatment, and make a claim straight away².

If these new members then stopped their membership, the costs of their treatment would ultimately be paid for by longer term members, which isn’t a fair situation. Remember, people with pre-existing conditions can still access treatment in a public hospital under Medicare, even while they’re serving the 12-month waiting period with their health fund⁴.

Does a pre-existing condition mean you’ll pay more for health insurance?

People with a pre-existing condition are entitled to purchase any type of hospital cover at the same price as those who don’t have a pre-existing condition (waiting periods apply)⁴.

Can a health insurer refuse to provide you with cover if you have a pre-existing condition?

In short, no. By law, health funds must allow you to purchase hospital cover regardless of whether or not you have a pre-existing condition¹. Once you’ve served the required waiting period, you’ll be entitled to claim and receive any benefits available under your policy.

Are there any exemptions on the waiting period for pre-existing conditions?

There are certain exceptions to the 12-month waiting period for pre-existing conditions. These exemptions apply to psychiatric care, rehabilitation, and palliative care, which have a two-month waiting period even if pre-existing¹.

Does the two-month waiting period always apply to mental health conditions?

Although you’d usually need to complete a two-month waiting period if you wish to upgrade your hospital cover to higher benefits for psychiatric care, there are some exemptions¹.

From 1 April 2018, people can upgrade without serving the two-month waiting period, in order to access higher benefits for psychiatric care within a private hospital¹. There are conditions to this exemption, including it only being applicable once per lifetime, and only if you have already completed an initial two-month membership on any level of hospital cover.

Purchasing health insurance with a pre-existing condition

Remember, if you have a pre-existing condition you can still purchase hospital cover with any health insurer - you may simply need to serve a waiting period before receiving the benefits of your cover. iSelect can help you compare health insurance policies and providers, in order to find a health policy for your needs. Call our friendly team on 13 19 20 for more information.

Sources:

1. https://www.privatehealth.gov.au/healthinsurance/howitworks/waitingperiods.htm#preexisting
2. http://www.ombudsman.gov.au/publications/brochures-and-fact-sheets/factsheets/all-fact-sheets/phio/the-pre-existing-conditions-rule
3. https://www.legislation.gov.au/Details/C2016C00911
4. https://www.privatehealth.gov.au/healthinsurance/whatiscovered/medicare.htm