Private Health Insurance Frequently Asked Questions
Private Health Insurance Frequently Asked Questions
Health Insurance
What is private health insurance?
The purpose of private health insurance is to help with some of the costs related to medical treatment in a private hospital, and out of hospital with private extras providers. Private health insurance can allow you to be treated as a private patient in a public and private hospital, and can help cover some expenses related to ‘extras’ services. Extras can include treatment services such as physiotherapy, dental, optical, and more.
What does private health insurance cover?
There are three forms of coverage offered:
- Hospital Cover
- Extras Cover
- Hospital and Extras Cover (Combined)
Private Hospital Cover may give you access to be treated as a private patient in both public and private hospitals. Extras Cover can provide cover for other forms of health care generally not covered by Medicare (Eg: physiotherapy and optical).
How does private health insurance work?
Private Health Cover can help you pay for the cost of certain forms of medical care. This medical care can occur when you are being treated as a private patient in a private or public hospital and in a range of out-of-hospital services. To maintain your cover, you need to be a member of a private health fund and have your policy paid up to date.
Which health insurance is the best?
While there is no “best” health insurance policy it can be important to find a policy that suits your needs and circumstances. At iSelect we compare a range of health insurance policies from nine Private Health Funds, providing side-by-side results, allowing you to select the policy that suits your needs and circumstances.*
Check out our private health funds:
- AHM
- Australian Unity
- AIA
- Bupa
- Frank Health Insurance
- HCF
- Latrobe Health Services
- nib
- TUH Health Fund
*iSelect does not compare all providers or policies in the market and not all policies or special offers are available at all times, through all channels or in all areas. Not all policies available from our providers are compared by iSelect and due to commercial arrangements and customer circumstances, not all policies compared by iSelect are available to all customers. Learn more.
Why should I take out private health insurance?
Although us Aussies have a great public healthcare system, Private Health Insurance may certainly be worthwhile depending on your circumstances. Whether it’s as a result of your life stage or lifestyle or simply planning for the unplannable, Private Health Insurance can not only give you peace of mind, but also a variety of benefits. Private health cover may give you the choice of the medical professional treating you in most circumstances, it can assist with the costs of medical treatments that fall outside of Medicare, it can shorten your elective surgery wait, and also allow you to be treated as a private patient in both private and public hospitals.
Who offers health insurance in Australia?
In Australia, there are almost 50 private health funds available to service your private healthcare needs outside of Medicare coverage.
Check out the list of private health funds in Australia (as of Oct 2021). Note, iSelect does not compare all health funds or policies in the market:
- ACA Health Insurance
- Ahm Health Insurance
- Apia Health Insurance
- Australian Unity
- Allianz Health Insurance
- Budget Direct Health Insurance
- Bupa Health Insurance
- CBHS
- Cessnock District Health Fun
- CUA Health Insurance
- Defence Health
- Doctors Health Fund
- Emergency Services Health
- Frank Health Insurance
- GMHBA
- GUHealth
- HBA
- HBF
- HCF
- HealthCare Insurance
- Health Partners
- Health.com.au
- HIF
- IMAN Health Cover
- Latrobe Health
- Medibank
- Members Own Health Insurance
- Mildura Health Fund
- myOwn Health Fund
- Navy Health
- Nib
- Nurses & midwives health
- Onemedifund
- Peoplecare
- Phoenix Health Fund
- Police Health
- Qantas Health Insurance
- Queensland Country Health Fund
- RACQ
- Reserve Bank Health Society
- RT Health Insurance
- St.LukesHealth
- Teachers Health
- Territory Health
- Transport Health
- TUH
- UniHealth
- Westfund Health
Source: https://www.apra.gov.au/register-of-private-health-insurers
How many Australians have health insurance?
According to the Australian Bureau of Statistics more than half (56.9%) of Australians had private health insurance in 2019-2020 with the most common type of cover being hospital and extras cover (45%). *
Public vs. private health insurance comparison
Australia’s health care system is made up of two forms of insurance: private and public.
- Public Health Insurance: Medicare is the public healthcare system that provides free treatment in public hospitals for anyone with a valid Medicare card. Most vital medical treatments are covered by Medicare.
- Private Health Insurance: Has the benefits of allowing you to be treated in both public and private hospitals as a private patient, expedites your elective surgery wait times and, in some circumstances, allows you to choose the medical professional treating you.
Can I check how Australian health funds are performing?
The Commonwealth Ombudsman generates an annual statement to assist consumers in understanding the performance of their chosen health fund and the delivery of their service. It is also a great source to see how your fund is performing in contrast to others.
Is private health insurance worth it?
Private health insurance can be beneficial if you don’t want to endure prolonged waiting times for elective medical procedures and generally allows you to choose the qualified doctor or specialist of your choice. Private Health insurance could also help with paying for medical expenses such as emergency ambulance trips (depending where you live in Australia) and potentially cover some of the cost of optical, dental, and physiotherapy treatments.
What happens if I don’t have health insurance?
Private Health Insurance isn’t legally required in Australia, however, there are some ways the Australian Government encourages Aussies to give it a go.
Lifetime Health Cover (LHC) is a government initiative which dictates that once someone turns 31 and doesn’t have private hospital cover, then that person’s future premium can increase by 2% for each year they didn’t have cover post turning 31.
The Medicare Levy Surcharge (MLS) also encourages high-income earners and families to take out private cover once they reach a certain level of earnings. If they don’t take out private health cover, and they fall into certain income brackets, then they could begin paying the MLS. The MLS is an extra tax that is ‘levied’ on your total income, beginning at 1% to 1.5%. The MLS is paid in addition to the Medicare Levy.
Taxable Income reached to be impacted by the MLS:
- For singles, the income amount is $90,000.
- For Families, the income amount is $180,000.
Why is health insurance important?
Choice and peace of mind! Regardless of your age and your lifestyle, life can surprise you with the unexpected. Private Health Insurance can give you some fantastic benefits including jumping the elective surgery wait queue, private patient status not only in private but public hospitals, and the potential to choose your doctor or specialist in some treatments.
What impacts the cost of health insurance?
There are many factors that play a role in your private health insurance costs.
- Your age (ie: Lifetime Health Cover Loading post 31 years old)
- Taxable Income bracket
- Family status
- Chosen policy and health fund
- Chosen excess amount
- Amount of people covered on the policy
Can I claim health aides (Eg: orthotics) and health improvement services on private health insurance?
With our way of life altering significantly over the past few years many Aussies, regardless of age, have begun seeking medical assistance for a variety of health aides to improve their daily activity. Many of us are walking a lot more than we used to, and for that a professional may identify orthotics is beneficial to correct movement issues with our feet. One of the benefits of having Private Health Insurance is the ability to claim some health aides on extras cover policies.
These aids could include (but are not limited to):
- C-pap
- Orthotics
- Compression garments
- Nebulizer
- Hearing aids
In addition, many health funds are recognizing that in some cases activity can help maintain wellness when someone has a diagnosed medical condition. You could claim benefits for gym classes, weight loss, quit smoking classes and other initiatives to improve your health condition.
It is important to consult with both your private health fund and medical professional to see what is required to claim. In most cases a doctor’s note is required and a form to be filled out.
What is a Private Health Information Statement (PHIS)?
Private Health Information Statements (PHIS) provide an overview of the broad policy features available in private health insurance. The benefit of the PHIS is that it allows the policyholder to review their current policy, and more accurately compare it against other products available in Australia. They are required by law to be accessible to anyone with a private health insurance policy in Australia.
There are three forms of Private Health Information Statements:
- General Treatment: (Extras)Explains the benefits and limits of your general treatment cover in your chosen health insurance policy.
- Hospital: Explains the clinical categories the policy will cover. It will provide further information on any potential additional payments such as excess and waiting periods.
- Combined: Combines both General Treatment and Hospital Cover to explain both their benefits and exclusions.
What are Fund Rules?
Fund Rules are the set of rules that are used to govern your private health insurance policy. The Fund Rules cover the overall terms and conditions of your membership in which all people included in the policy have to follow to maintain a policy and claim on certain services. Fund Rules can alter over time due to governmental changes, and if this occurs, your provider will notify you of such changes. It’s important to note each fund has additional rules above and beyond the government rules, so it’s important to understand which policy and fund may suit you.
What is a recognised provider?
A recognised provider is a provider that has met a set of criteria determined by your health fund. Generally, benefits can only be claimed when using the service of a recogonised provider. Recognised providers must work in private practice and have professional qualifications recognized by the health fund in question. This commonly relates to health professionals such as optometrists, physiotherapists, and dentists.
Hospital Cover
How does hospital cover work?
Hospital cover may help with paying for the cost of some of your medical expenses when you are admitted to hospital as a private patient. The types of services which could be covered depends on the level of hospital cover you choose. Hospital cover can help cover some or all of the cost of doctors’ fees, operating fees, accommodation, and intensive care depending on the gap payable by the patient daily.
Why should I get Hospital Cover?
In many cases hospital cover can give you more choices when it comes to hospital admissions. Generally, private hospital cover gives you your choice of surgeon or treating specialist when admitted and choice of participating hospital where your surgeon practices. The key difference between going private and public is that private hospital helps you in avoiding lengthy waiting lists in the public system.
What are the private health insurance product tiers?
As regulated by the Australian Government, hospital insurance policies must be categorised in one of four categories. These categories allow for customers to clearly understand the minimum number of services and treatments covered on their respective policies.
These categories are:
- Gold
- Silver
- Bronze
- Basic
If your policy includes coverage for additional items, it may be considered as a ‘Plus’ Policy (Eg. Silver Plus).
What is an excess and a co-payment?
If you’re admitted to hospital as a private patient, there may be costs you need to pay to be admitted.
An excess or co-payment are fees you agree to pay as part of your chosen policy which are paid upon admission to hospital. Many customers opt for an excess or a copayment to reduce the cost of their premium.
An excess is a lump sum you pay to the hospital in most cases upon your admission. Most excesses are capped depending on the policy you chose per membership year.
A co-payment (generally a daily charge) is an amount you agree to pay when receiving treatment in hospital or day surgery. A co-payment is usually capped upon a certain number of nights (e.g., you pay the fee for the first seven nights.)
In many cases, there may be other applicable charges known as gap payments, which are paid in addition to the excess or co-payment.
Am I likely to pay an out-of-pocket cost above my excess or co-payment for medical costs?
Potentially. In some cases when being admitted to hospital as a private patient, there are times you have to contribute towards the cost of your treatment above the excess. You may experience situations in which your specialist charges more than the pre-determined ‘Schedule Fee’ or MBS fee. If this occurs, you will be responsible for the remaining expenses related to treatment and prothesis known as the “gap”. It is important to remember to ask your medical team, health insurer, and hospital about any potential ‘gap’ costs you may incur prior to admission if possible.
What does ‘no gap’ mean in health insurance?
With consideration to hospital cover, each form of treatment has what is known as a ‘Schedule Fee/MBS fee’ established by the Australian Government. In some cases, a surgeon may charge the exact amount set on the MBS which results in ‘no gap’ payment (outside of any applicable excess). In other scenarios the health fund may participate in a ‘no gap’ scheme in order to cover some or all of the gap payment.
It’s important to check with both your surgeon and health fund to understand any potential gap payments. Where a specialist charges over the ‘Schedule Fee’ then you (not Medicare or your health fund) are responsible for any remaining costs.
Do I have to wait to claim? What is a pre-existing condition in health insurance?
A Pre-Existing Condition is a condition, sicknesses, or ailment that was existing for a period before seeking or upgrading your cover (as determined by your fund’s appointed doctor). In some circumstances, a pre-existing condition can be determined even if not formally diagnosed. If you have a pre-existing condition, you may still be able to find coverage from your fund after serving a twelve-month waiting period for pre-existing conditions.
What is an excess?
An excess is a lump sum paid upon admission into hospital as a private patient, depending on your policy and fund. Depending on your policy, your excess may be owed, once per calendar year, once per membership year, or once per hospital admission.
Does health insurance cover home nursing?
Simply put, this will depend on your fund and policy. Home nursing has become increasingly relevant for Australians as a result of COVID-19, and as such more and more health funds are offering it. This allows anyone covered by certain health insurance policies to return home from hospital sooner with at-home care.
This at-home care could include nursing, occupational therapy, personal care, physiotherapy, and meal provisions. The benefits of this form of care include more control over your recovery, recovering in a comfortable environment, and no out-of-pocket costs. You will need to check with your fund if your policy can cover these benefits.
Does hospital cover provide coverage for rehab and chemo at home?
Can I claim weight loss surgery on private health insurance?
Does private health cover insulin pumps?
Does private health insurance cover X-rays, ultrasounds, and other preventative tests?
In recent years, some funds are covering more and more preventative tests. They’re generally only offered publicly (Eg: at a pharmacy) where a ‘gap’ is charged. Depending on your policy, you may have cover for the following preventative health checks at specific locations:
- Glucose level
- Blood pressure
- Cholesterol
- Body Mass Index (BMI)
Does private health insurance cover out patients specialists’ consultations?
Are youth discounts available for those aged 18-29?
What’s the Private Patients Hospital Charter?
The Private Patients Hospital Charter provides an outline of your rights and responsibilities as a private patient in hospital. It explains what fund members can expect from their health fund, hospitals, and doctors.
Source: https://www.health.gov.au/resources/publications/private-patients-hospital-charter
Extras Cover
How does Extras cover work?
Extras cover can help cover part or sometimes all of the cost of certain treatments and services not usually covered by Medicare. Extras cover can include cover for a range of services including dental, optical, and physio treatments.
Extras can be purchased as a standalone policy or combined with hospital cover. Additionally, if you do decide to take out hospital cover and Extras cover, both policies don’t have to be with the same provider.
Each fund will vary their levels of Extras Cover. Depending on your policy, you may be able to receive rebates on the following health services:
- Dental (ranging from basic check-ups and cleans, to major procedures like root canal, orthodontics, and wisdom teeth removal)
- Optical (Eg: frames and prescription lenses)
- Psychology
- Chiropractic and osteopathic treatment
- Podiatry
- Remedial massage
- Some Prescription pharmaceuticals that cost over and above the PBS
- Occupational therapy
- Speech therapy
- Preventative health services (Eg: medically necessary gym memberships)
- Hearing aids and other health aides such as CPAPs
- Home nursing
What’s the difference between routine, complex and major dental?
The major difference between preventative and routine dental, complex, and major dental lies in the different procedures each category is related to. Here is a breakdown of what could be included in each category, however it is important to note all policies can differ in the way they categorise these services:
- Preventative and Routine: X-rays, cleans, tooth removal, and filling and other minor restorative services
- Complex: Includes periodontics (root canal planning, oral surgery for prostheses, and jaw injuries) as well as endodontics (filling of a root canal)
- Major: Crowns, veneers, bridgeworks, and implants and dentures
Additionally, when it comes to coverage in an Extras policy, a basic type of policy may often only provide cover for preventative and routine dental. For more complex and major dental cover, a medium or comprehensive type of policy is likely to suit your needs better. Additionally, different procedures will come with different benefits, annual limits and waiting periods.
Are braces covered by health insurance?
In short, yes, depending on your policy. Braces and other major orthodontic procedures are generally covered on a more comprehensive Extras policies. It’s important to note that there’s often a 12-month waiting period for orthodontic services depending on the policy and provider and you are likely to have some out-of-pocket expense. You also need to attend in person to have a dentist or an orthodontist mold and fit your orthodontic appliance. Online services where you fit your own molds are usually not covered.
Is Invisalign covered by private health insurance?
Invisalign is a teeth alignment product that functions similar to a mouthguard, and which applies a constant force to your teeth to affect their movement, usually with the goal of straightening your teeth as an alternative to metal braces. Invisalign products are typically clear, lightweight, thin plastic trays which as mentioned, function similar to a mouthguard.
In terms of health insurance, Invisalign could be covered by Extras cover depending on your policy.
Are veneers and teeth whitening covered by private health?
Yes, depending on your policy. Treatments like this are typically only covered on Top Extra Cover, and coverage can vary between providers. Porcelain veneers which are fingernail-thin covers added to the front of teeth to enhance both the whiteness and shape of your teeth is considered a major dental procedure, therefore it’s usually only featured on Top Extras Cover policies. If you are looking for something a little less expensive, some funds do cover teeth bleaching in their Extra Cover policies.
Are dental implants covered by private health insurance?
Yes, dental implants can be covered under some Extras policies depending on the fund. These are classified as major dental services, and therefore coverage is typically found on Top policies.
Does Medicare cover dental treatment?
Unfortunately, in most cases Medicare doesn’t provide the same level of cover for dental treatment as it does for many hospital procedures. That said, Medicare does provide cover for some essential dental procedures for eligible children and adults.
You can find more information on the Medicare website here:
https://www.healthdirect.gov.au/cost-of-dental-care
Because Medicare offers very limited public dental treatment, and costs for dental treatment can be very expensive (especially for major dental work), Extras cover can be a suitable option for many Australians when it comes to their dental needs.
Does Medicare cover wisdom tooth removal?
Each state has their own eligibility criteria for receiving dental treatment in the public health system, and even if you do qualify, you could end up on a lengthy waiting list. Some of the benefits of taking out an Extras policy, which can help cover wisdom teeth removal in the chair, and other dental services, may include:
- No eligibility criteria for receiving treatment (granted you’ve served any waiting periods)
- Choose your own dentist (or use your fund’s preferred provider to potentially lower or remove any gap fees)
- Avoid lengthy waiting lists
- Have some or all of the cost covered (although depending on your fund you may still have to pay a gap fee, which in most cases is lower than the cost of seeing a private dentist and paying the full cost of treatment out of pocket)
It’s important to consider if you are going into hospital for wisdom teeth removal you will likely face large out of pocket costs if you don’t have hospital cover.
What is gap free preventative dental?
In health insurance, depending on the service and policy, health funds will likely only cover a portion or a percentage of the cost of certain health services. The difference between what is charged and what your health fund covers is referred to as a ‘gap’ or ‘gap fee’, which you’re required to pay as an out-of-pocket cost.
When it comes to dental services covered by an Extras policy, some funds offer gap-free preventative dental services if you use one of their preferred providers. Depending on the fund, the policy, and their relationship with preferred providers, gap fees could be waived for preventative dental work, such as checkups and cleans.
For example, if you’re a family with several children requiring dental work, those out-of-pocket costs could add up substantially over a year for annual dental work like checkups and cleans. But by taking out Extras with a fund that has a preferred provider network with gap free services, you could save money on these services you know you’ll use annually, as opposed to those ‘just in case’ major dental services that you might only claim on every few years or less.
Can I claim pharmacy with my health insurance?
Can I claim wellness programs and gym membership with my health insurance?
Does private health insurance cover hearing aids?
Health Insurance Waiting Periods
What is a waiting period?
A waiting period when it comes to health insurance is the period of time at the start of your membership before you can claim some benefits and services of your policy. The length of the waiting period can depend on the treatment, your health fund, and your type of cover. For example, waiting periods can differ between extras and hospital cover policies.
You may be required to wait for a particular procedure or service when you;
- Take out a health insurance membership for the first time;
- Renew a lapsed membership or;
- If you’re upgrading your cover to include new benefits that weren’t included on your existing policy.
An example of a waiting period could be that you might take our extras cover to help with the cost of preventative or routine dental care. Before you claim on these benefits, you may be required to wait two months depending on your fund. In regards to hospital waiting periods, these are usually consistent between funds. Most funds have a two-month waiting period for new conditions (Eg: if you had a covered condition that was not deemed pre-existing), and 12 months for all other conditions that are deemed pre-existing, including pregnancy.
One of the key reasons for waiting periods is to protect the health insurance system. If we didn’t have waiting periods, people may sign up to health insurance purely to claim a single benefit before then cancelling their policy following treatment.
How can I avoid health insurance waiting periods?
In short, you can’t as most health funds will have waiting periods when you first sign up or upgrade your cover.
When you switch health policies or funds to a similar level of cover, the hospital waiting periods you’ve already served are protected by law and you will not have to reserve them. However, if you’re upgrading your plan to include a higher level of cover, you will have to serve waiting periods for those new benefits.
If you’re a bargain hunter, keep an eye out for offers and incentives available from some funds including waiving waiting periods on some extras for new customers. It’s important to note that hospital waiting periods are not typically waived. So if you’re thinking about taking out private hospital cover for a procedure, it’s recommended that you take cover out as soon as possible and start serving those waiting periods.
Do I have to reserve waiting periods if I switch funds?
Any hospital waiting periods already served are protected by law when you switch to the same level or a lower level of cover. Generally, an existing member will be asked to serve waiting periods for hospital cover when they upgrade their cover to include new services. Additionally, if cover is allowed to lapse, has been cancelled, or particular services removed for a period of time waiting periods will need to be re-served. With extras, most funds will also honour any waiting periods already served, however unlike hospital cover, they are not bound by law to do so. When you upgrade your extras, you will have to serve any waiting periods to claim the higher benefits, or new services on your cover.
How long will I have to wait before I’m eligible for dental/optical/chiro/physio services?
The amount of time you have to wait before being eligible for various extras services will depend on the health insurance provider and the policy.
Below are some typical waiting periods for extras services but remember, the waiting periods differ depending on your policy and provider:
- 2 months for general dental benefits and physiotherapy
- 2 or 6 months for optical items, like glasses or contact lenses
- 12 months for major dental procedures, like crowns or bridges and orthodontics
- 12 months for hearing aides and other health aides
Depending on your fund, some basic treatments may not require waiting periods. Check the policy brochure of your chosen fund to ensure you have a clear understanding of the waiting periods that apply to your policy.
Pregnancy
Should I buy private health insurance for pregnancy?
Broadly speaking, pregnancy cover may provide you with flexibility, choice, comfort, and continuity of care. Your decision to go private or public will depend on your situation, needs, and expectations around continuity of care during your pregnancy, as well as for the birthing procedure, and aftercare. It’s important to know that pregnancy is covered within the public health system, and for obvious reasons, you don’t go on a public waiting list to access pregnancy services unlike many other procedures. That said, there are some key differences between going public and private for your pregnancy.
One of the key benefits of private pregnancy cover is the ability to choose your own obstetrician and have them provide ongoing support throughout your entire pregnancy. In the public system, you generally won’t have one dedicated obstetrician supervising your pregnancy, and instead see the doctor or midwife available at the time of your appointment and birth.
During a private check-up with your obstetrician, you will likely have a quick ultrasound scan of your baby however, a scan is generally only offered to public patients at weeks 12 and 20, depending on the patient’s medical circumstances.
Comfort is another deciding factor for private patients, as private hospitals generally allow for better accommodation and facilities, such as private rooms, the ability for you to have a longer fixed stay in hospital compared to going public (even if you have no complications) and additional comfort features like a wider choice of food menu. The public system will likely see you in a shared ward with other patients, and your partner or support person may not be able to stay overnight. It’s important to note in most cases there is likely to be some out-of-pocket cost for pregnancy services. If privacy is important to you, private cover may be an option to consider.
What is the waiting period for pregnancy cover?
The waiting period for pregnancy and birth related services is generally 12-months before you can claim on benefits. You will have to serve this waiting period if you’re taking out cover for the first time or upgrading you cover to include pregnancy.
Which type of health insurance covers pregnancies?
If you’d like to be covered for pregnancy, your hospital cover needs to include ‘pregnancy and birth-related services’ at least 12 months before the baby is born. This will help cover pregnancy complications, the birth, and your postnatal care.
Lower cost health insurance policies unfortunately do not usually cover pregnancy, and while your policy will depend on your specific needs, you will require a cover that has the gold clinical category of pregnancy and birth. While rare, in some cases there may be silver plus policies that could cover pregnancy.
We recommend checking with your health fund prior to getting pregnant, and after serving your waiting period, to find out what hospitals are participating with your fund. From there you can start looking at obstetricians that practice at those hospitals. Once you are pregnant, it’s worth letting your health fund know as there may be some additional support and information they can offer you. In particular, it’s important to understand what you need to do when the baby arrives to ensure they are covered.
Is my baby also covered under a pregnancy policy?
Pregnancy cover does not automatically cover your baby once it is born, so it’s important to understand how to place your baby on your policy. For a variety of reasons, sometimes your baby may be required to spend some time in the special care nursery. This can cost upwards of thousands of dollars if the baby isn’t added to your policy. If you choose not to cover your baby, your baby may be sent to another public hospital for care. By checking with your health fund prior to the birth, you know exactly where you stand, and this gives you one less thing to worry about.
When taking out pregnancy cover, check the requirements of the fund when it comes to placing your baby on your policy. Some providers might require you to have this cover in place for a set period prior to the birth. Other funds may require you to call following the birth to upgrade your cover to a family policy, and have your baby adequately covered.
If I’m planning a family, when do I need to take out health insurance for pregnancy?
Generally, we recommend that you take out pregnancy cover a minimum of six months before you plan to conceive, so your baby is born outside of the 12-month waiting period, and you’ll then have full access to all pregnancy services. If your baby is born early and you’re still in a waiting period, the baby and you will both not be covered. Once you’re pregnant, it’s too late to take out cover due to the 12-month waiting period that must be served before you can claim on pregnancy benefits.
Does private health insurance cover IVF treatments?
It’s important note that if you are not buying a gold policy, you must check if your cover has Assisted Reproductive Services included on your policy, as this is different to pregnancy and birth. As with any hospital admission, different health funds have different agreements with IVF facilities as well as certain terms around which services are covered, and to what extent. We recommend understanding exactly what you’re covered for before embarking on your IVF journey.
A small portion of IVF treatments may also be covered by Medicare. If you don’t have private cover, you may however be required to pay even larger ‘out-of-pocket-costs’ for your admission for treatment. It’s important to note in most cases there is likely to be some out-of-pocket cost for IVF, which will vary depending on the clinic and treatment.
The Medicare Levy Surcharge (MLS)^
What is the Medicare Levy Surcharge?
The Medicare Levy Surcharge (MLS) is an additional tax some Australian taxpayers may have to pay if they don’t have an appropriate level of hospital cover when their taxable income is above a certain threshold. The MLS was introduced to encourage higher income earners to take out private hospital cover to help take the demand and strain off the public health system.
The Medicare levy surcharge is calculated at between 1% and 1.5% of your taxable income, and is payable in addition to the Medicare levy that most taxpayers pay, even if they’re not high income earners. This means that the more you earn, the more you are likely to pay in tax if you don’t have private hospital cover.
For families with children, the threshold increases by $1,500 for each child after the first. For example, after one child your couple threshold goes from $180,000 to $181,500 before you will be charged the MLS as a result of not having suitable hospital cover. If your income is below these thresholds, you’re exempt from the surcharge.
Do I have to pay the Medicare Levy Surcharge?
You may have to pay the Medicare Levy Surcharge (MLS) if you don’t have suitable level of hospital cover with a registered health fund (note, extras only cover does not make you exempt from paying MLS) and are a single person with an annual taxable income greater than $90,000 or a couple or family with a combined taxable income of $180,000.
What is the difference between Medicare Levy and Medicare Levy Surcharge?
The Medicare Levy is paid by most taxpayers whether they have health insurance or not. It is 2% of your taxable income and helps to fund the Medicare service. This is an additional charge to the tax you pay on your taxable income.
The Medicare Levy Surcharge however, is paid by Australian taxpayers who don’t hold an adequate level of private hospital cover and who earn above a certain income. This is paid in addition to the Medicare Levy.
How can I avoid the risk of paying the Medicare Levy Surcharge?
If you’re eligible to pay the Medicare Levy Surcharge based on your income threshold, the simplest way to help avoid the risk of paying the surcharge is by taking out suitable private hospital cover. It doesn’t need to be top cover (I.e. Gold) – even a Basic or Bronze policy will do.
^This should be treated as general information only, for specific tax advice it’s recommended you speak with an accountant or financial advisor.
Lifetime Health Cover Loading (LHC)
What is Lifetime Health Cover Loading?
Lifetime Health Cover (LHC) loading is a government initiative designed to encourage younger and healthier Australians to take out private hospital insurance earlier in life. If you take out hospital cover before July 1st following your 31st birthday, you won’t have to pay LHC as long as you continue to hold eligible hospital cover.
Customers without eligible hospital cover by July 1st following their 31st birthday who decide to take out hospital cover later in life will have to pay 2% LHC loading on top of their premium for every year they were without cover and pay it for 10 years. The maximum loading is 70%, which means you could be paying a lot more to get the same cover as someone the same age as you who has held continuous cover. It’s a case of the sooner the better in terms of getting hospital cover, not just to reduce your LHC payment, but also to access treatment for the unknown.
For example, if you wait until you are 35 to take out private hospital cover, you could pay an extra 10% on top of your hospital cover premium. If you wait until you are 40, you could face paying up to 20% more, if you wait until you are 45, you could face paying an additional 30% on top of your premium and if you wait until you are 50, you could pay an additional 40%, and so on up to a maximum loading of 70%.
Once you’ve paid the LHC for 10 consecutive years, your loading is removed, and you’ll pay as much as someone who took out the same policy in their 20’s. Only hospital cover (not extras only policies) will exempt you from paying LHC loading down the track.
Is the private health insurance rebate applicable to the Lifetime Health Cover (LHC) loading on health insurance premiums?
I’ve just turned 30; do I have to purchase private health insurance?
Private health insurance is optional in Australia. We have a Medicare system that will allow you to access treatment you need, however, you will generally go on a public waiting list. Depending on your income, taking out hospital cover could help reduce the risk of paying the Medicare Levy Surcharge, and the sooner you take out cover, the more you could avoid having to pay the Lifetime Health Cover LHC) Loading on your premiums if you decide to take out cover later in life.
I’ve just become a permanent resident; can I purchase private hospital cover without Lifetime Health Cover loading?
Yes, you can. If you’ve just become a permanent Australian resident and are over 31, you’ll have one year from the date your register for your first interim (blue card) or full (green card) Medicare benefits to purchase hospital cover without incurring a loading. If you’re under 31, the same rules will apply to that of Australian residents, which means you have until 1st July following your 31st birthday to purchase hospital cover without incurring the loading.
I’ve just received a letter about Lifetime Health Cover. What do I need to do?
If you’ve recently turned 31 or are registered for full Medicare benefits, you may have received a letter from the Department of Health to inform you about the Lifetime Health Cover (LHC) loading which may affect your decision on whether you take out private health insurance.
If you decide not to take out private hospital cover before the 1st of July following your 31st birthday or you are receiving full Medicare benefits, you will generally face an annual 2% financial loading on your hospital cover should you decide to take out cover down the track. The older you are at the time of purchase, the higher the cost.
If you received the letter but already have hospital cover and the correct LHC loading has been applied, no further action is required. However, if you’re not sure whether your correct loading has been applied, it’s best to contact your health insurer for assistance.
If you don’t have hospital cover but would like to consider it, a great place to start is a health insurance comparison service like iSelect who can compare a range of policies from their range of providers and recommend a policy for your needs and budget*.
Health Insurance and Tax
What is the Medicare levy?
The Medicare levy is a tax levy that helps fund Medicare, Australia’s public health system. The Medicare levy is a 2% charge on most Australians taxable income, which is paid in addition to regular income tax.
Is private health insurance tax deductible?
How can I claim the Australian Government Rebate on private health insurance?
There are generally two main ways that eligible Australians with health insurance can claim the private health insurance rebate. These include:
- Directly through your health fund – who will apply the rebate to your premiums
- Via your tax return at the end of the financial year (as a refundable tax offset)
What happens if I nominate an incorrect rebate tier?
Generally speaking, the income tier which you select is only an estimation of your earnings for the full financial year, which can vary for a variety of reasons between July 01 and June 30.
The main implication to take into account is that any discrepancies between the rebate tier you select, and your taxable income for the financial year, can affect the size of your rebate. For example, if you earn more than your chosen tier, you likely won’t be eligible for as much of a rebate, and you may need to repay the difference through your tax return. On the other hand, if you earn less than your selected rebate tier, you could receive a higher rebate when you lodge your tax return at the end of the financial year.
Do I need to let my health fund know what my income is to determine my rebate tier?
What happens if my or my family’s income changes from one tier to another during the financial year?
If your income changes it simply means is that the ATO will adjust your PHI rebate based on the income information in your tax return, and rectify any discrepancies.
For example, if your income comes in lower than your chosen rebate percentage, you could receive a higher PHI rebate, and if your income comes in at higher, you could receive a lower rebate and pay the difference back at tax time
You can usually change your rebate tier online with your health fund if you’d prefer not to wait.
What’s Savings Provision Entitlement?
This ensures that a person entitled to an increased rebate, because someone on the policy is 65 or older, will continue to receive the increased rebate even if the older person leaves the policy, and provided that the policy is not replaced by a couple or family policy with another person (other than a dependent child).
This was introduced by the government to ensure that a change in family circumstances doesn’t lead to overpayment, and or a debt to the government, via the private health insurance rebate.
Source: https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd0405/05bd070#Passage
What is a Medicare levy exemption?
What is a Medicare entitlement statement?
Almost all Australians with a taxable income pay the Medicare levy (with some exemptions). If you have private hospital cover, you’ll still be required to pay the Medicare levy. If you’re a higher income earner, suitable Private Hospital Cover may help reduce the risk of paying the Medicare Levy Surcharge (MLS).
What is the Private Health Insurance Australian Government Rebate?
The ATO assesses all Australians with health insurance for their eligibility to receive the private health insurance rebate. This is a rebate eligible Australians receive on their private health insurance premiums. The rebate is income tested, meaning the size of your rebate, and whether or not you’re eligible, can depend on your income.
Here are some quick links for more information on the ATO website:
Income thresholds and rates for the PHI rebate:
Understanding your eligibility for the PHI rebate:
https://www.ato.gov.au/Individuals/Medicare-and-private-health-insurance/Private-health-insurance-rebate/Private-health-insurance-rebate-eligibility/
The ATO Medicare levy calculator:
https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=MedicareLevy&anchor=MedicareLevy&anchor=MedicareLevy/questions&anchor=MedicareLevy/questions#MedicareLevy/questions
Who should claim a private health insurance Australian Government Rebate?
Anyone with private health insurance will automatically have their eligibility for the private health insurance rebate assessed by the ATO when you lodge a tax return. You can choose to have your rebate applied directly to your premiums by your health fund, or the ATO will factor this in when assessing your tax return. It’s worth noting that the private health insurance rebate is income tested, meaning that if you’re a higher income earner, your rebate could be reduced, or in some cases deliver no rebate.
Ambulance Cover
What is ambulance cover?
Ambulance cover can cover some or all of the cost of emergency transport to and from hospital. Depending on the state you live in, cover can be purchased from your state’s ambulance authority, or from a health fund. Alternatively, you could purchase private health insurance policy that includes a level of ambulance.
It’s important to note that there can be some limitations or restrictions with the cover you purchase. Make sure you check all the coverage details before you purchase a policy.
What insurance covers ambulance?
How can I get the Ambulance Levy Exemption?
Ambulance cover is treated differently in almost every state in Australia. Because of this, each state has their own criteria that establishes who is potentially exempt from some or all ambulance costs in their state. Common examples of exemption criteria include holding a Pensioner’s Concession Card or Health Care Card.
Does Medicare cover ambulances? If not, how am I covered?
Medicare doesn’t cover ambulance, but if you have to pay for ambulance services outright, the amount you pay depends on the state you live in. For example, in Queensland, all emergency pre-hospital ambulance treatment and transport costs are covered by the State Government, and if you live in Tasmania, then all ambulance costs are also covered by the Government.
However, if you aren’t in the states above, you may find that you will need to foot the bill for an ambulance transportation, unless you have ambulance cover.
There may be additional exemptions from paying ambulance costs in your state, such as if you hold a Pensioner’s Concession Card or Health Care Card. For this reason, it’s important to check your state ambulance authority website to understand how coverage applies to you in your state.
Managing Your Policy
What is the process to claim on health insurance?
Making a claim should be a simple, straightforward process. In the event that you receive a treatment that’s covered by your policy, you can begin to make your claim. Depending on your provider you can either make your claim online, over the phone, via post, or on the spot using HICAPS with a participating health care provider (where the fund is charged directly and you only have to pay the gap, if there is one).
What’s the excess on my health policy?
When does private health insurance reset?
Some private health insurance policies reset at the start of every calendar year (January 1st) while others reset at the start of every financial year (July 1st). Some forms of health insurance reset based on a rolling 12-month year (the date that the service was first provided). To learn about your policy resets, refer to your policy product guide.
What happens if I cancel my health insurance?
It’s important to consider a few things when cancelling your policy:
- Whether you will be negatively impacted by the Medicare Levy Surcharge (MLS) or Lifetime Health Cover (LHC) Loading
- What impact will cancelling your health insurance have on your waiting periods? i.e. if you are cancelling your private health insurance, you may need to reserve any waiting periods you have already completed in the event you decide to take up PHI again.
What happens if any member of our family passes away?
In the event in which a family member passes away, the family threshold will continue to apply for the remainder of that financial year. In the circumstances where a dependent child passes away, any increase in threshold due to the child will continue to apply for the remainder of that financial year.
How do you add a partner to your health insurance?
Adding your partner to your health insurance policy is a straightforward process that can be achieved over the phone or online. It is important to be aware that waiting periods may apply to your partner when joining your policy and higher premiums apply on couple memberships.
Can you have your health insurance with more than one fund?
Yes, you can. This is called having ‘split health cover’. This occurs when a person takes out extras cover with one fund, and then hospital cover with another.
What is the benefit of changing my excess amount?
Your excess can have an impact on your premium costs. Generally, if you were to raise your excess, then you’ll likely pay less in premiums. This occurs because by raising your excess, you’re agreeing to pay more of any potential hospital bills, and as such your insurer would end up paying less.
Finding A Policy
How can I choose health insurance?
Choosing your health insurance is often about considering your current life circumstances.
When selecting a health insurance policy, it can be helpful to consider your immediate (and future) possible health requirements to determine a suitable level of cover for your needs. It may also be necessary to consider how many people will be covered within your policy (e.g. partners or dependents), and what budget requirements you have.
Once you’re ready to find your policy, you can use iSelect to compare from our range of policies and providers, and select the one which suits you.
How do I compare health insurance plans?
How do I find health insurance for specific treatments?
There are four main levels of private health insurance, ranging from Basic to Gold. There are also ‘plus’ variations of each tier, (Eg: Silver Plus) which can include additional cover for a range of procedures. With Basic cover as the entry level, each tier builds upon the next to include more access to specific treatments. These tiers are:
- Basic:Typically includes accident cover, and limited cover for rehabilitation, palliative care and psychiatric treatments.
- Bronze:Typically includes treatments for ear, nose and throat, gynecology, joint reconstruction, and cancer treatments.
- Silver:Typically includes treatments for podiatric, chest and lung, dental and heart and vascular system.
- Gold: Typically includes treatments for pregnancy and joints.
Is there a right age to have health insurance?
Although there is no specific ‘right’ age to get private health insurance, it may be important to keep the Lifetime Health Cover (LHC) loading in mind. If you choose not to take out private health cover and are about to turn 31, the LHC will add 2% to your premiums for each year you don’t have private health cover over the age of 30. For example, if you decide to get cover for the first time at the age of 39 you could be pay 18% more on that new policy than someone who has held continuous coverage.
Source: https://www.privatehealth.gov.au/health_insurance/surcharges_incentives/lifetime_health_cover.htm
How much health insurance coverage do I need?
Your level of coverage can often depend on your circumstances. This could include:
- Your age
- Any existing medical conditions
- Budget requirements
- Lifestyle
- How many people will be covered in your policy
How long does it take to be covered by your health insurance policy?
The time it takes to be covered by your health insurance policy can depend on whether or not you’re currently with a fund, have served the required waiting periods and/or what type of pre-existing medical condition you’re requiring coverage for.
For example, if you were to purchase a policy without having had health insurance prior, you may serve waiting periods stated by the Private Health Insurance Act 2007. The maximum waiting periods are:
- 12 months for pre-existing conditions: Any illness or ailment that has shown symptoms 6 months before you joined/ upgraded to a new policy.
- 12 months for pregnancy cover: Hospital admission must only take place 12 months post private health insurance purchase to be covered by the policy.
- 2 months for rehabilitation, psychiatric and palliative care (even in circumstances of pre-existing conditions): This could include, drug and alcohol rehabilitation, eating disorders and post-natal depression.
- 2 months in all other circumstances.
Source: https://www.ombudsman.gov.au/__data/assets/pdf_file/0017/35612/Waiting-periods-DL-Fyler-Web.pdf
Does my age, health, or lifestyle impact the price of my health insurance policy?
To ensure that health insurance is available to all Aussies, the price of your policy cannot be impacted by your health status, claiming history or lifestyle. Age may impact your health insurance costs if your fund provides age-based discounts, or if you’re impacted by LHC.
Rate Rise
What should I know about premium Increases?
In 2023, Private Health Insurance premiums are set to rise by an average of 2.9%.1The Minister for Health and Aged Care Media Release – Annual private health insurance premium rise
This works out to an average increase of around $134 per year on a family policy, and an average increase of around $60 for people on a singles policy.2Based on weekly calculations included in Minister for Health and Aged Care’ Media Release, multiplied by 52 weeks to reach an annualised figure
But this year, funds are increasing their prices at different times of the year. With some funds increasing on 1 April, whilst others are deferring to later in the year, it’s important that you check with your fund to make sure you understand when and by how much they intend to increase their prices.
Why did my health insurance go up?
Switching Health Insurance
How long does it take to switch my health insurance?
Although there is no exact timeframe, it is often quite a fast process.
How do I change my health insurance policy?
What should I look out for when reviewing my insurance?
Our lives are continuously changing and as such it’s important to remember to review your health insurance policy. It may be worth doing an annual check to see if your policy needs an update to reflect your life changes more accurately. It’s important to consider the features you’re paying for that you no longer use (such as pregnancy cover if you no longer require it), as well as things which you’d like to add by upgrading cover. If you’d like some assistance in finding a policy that suits your lifestyle and budget, feel free to call iSelect on 1800 784 772.*
Family
How much is health insurance for a family?
The cost of your family health insurance policy will vary depending on your provider, your level of cover, and your excess amount. For example, a combined hospital and extras cover will generally cost more than an extras-only policy. If you’re unsure which level of cover suits your family’s needs and budget, iSelect can help you compare a range of different policies and providers*
What should I know about covering dependents to age 31 and covering dependents with a disability?
What is family health insurance, and how does it work?
Family health insurance is private hospital and/or extras insurance that helps cover the cost of medical expenses should you or your family need them. We are lucky enough in Australia to have access to the public health system, Medicare, which helps to cover part or sometimes the entire cost of medical services. However, unlike private cover, Medicare doesn’t cover all services and generally doesn’t allow you access to choose your own doctor and hospital, and benefit from shorter waiting periods should you require treatment.
Family health insurance can be a great way to help protect your family and can also give you access to benefits that might help you save money.
There are generally three types of family health insurance policies to choose from:
- Family Hospital Cover: This type of cover is for in-hospital treatments at a private or a public hospital which can help cover surgeon fees and hospital accommodation up to the MBS fee. Hospital cover can provides you with the flexibility to choose your own doctor and hospital and depending on your level of cover, you will have access to shorter waiting periods for elective surgeries than if you were in the public system. Hospital cover is grouped into tiered levels including Basic, Bronze, Silver and Gold. The level of cover you require will depend on your family’s needs and budget.
- Family Extras Cover: Depending on your lifestyle, extras cover could provide great benefits to your family by covering part or all of the cost of some health services that Medicare doesn’t pay a rebate on, for example, dental or physio. Although the level of what is included in Extras cover is not regulated like hospital, there are generally three levels of extras cover to choose from, basic, medium, and comprehensive. Each provider may have different anmes for their levels of Extra’s cover, so it’s important to make sure you’re covered for what you need as not all services are covered in all policies.
- Family Combination Cover: Some families opt for combined cover which includes both hospital and extras cover on the one policy. You can select different levels of cover to suit your needs, for example, you may choose a top level – known as gold level – of hospital cover and a basic extras policy.
Which is the best health insurance for a family of two?
Unfortunately, there is no “best” policy. What constitutes a suitable policy will vary from family to family, and finding appropriate cover depends on your family circumstances, your needs, and your budget. If your family is made up of yourself and your partner, a couples health insurance policy may be suitable. A couple’s policy covers two adults, and those individuals don’t need to be married, just in a relationship. It can be taken out by married, de facto or registered couples.
Both you and your partner will receive cover for the same things at the same level of coverage. If, however, you and your partner have different medical needs, then you might want to consider two separate singles policies to suit your individual needs.
If your family is made up of yourself and your dependent, a single parent family policy may be suitable. This includes cover for one adult and dependent(s), including child/student/young adult dependents. Many health insurers offer policies designed for single parent families, which generally have lower-rate premiums compared with two-parent family cover2 However, the way a dependent is defined by your policy can vary between providers3. Generally speaking, a dependent is an unmarried person under the age of 18 years.
If you’re a single parent and are looking for single parent health insurance, it’s important to ensure you understand the details of your policy and how the fund defines a dependent for the purposes of health cover.
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Health Insurance & Tax
Tax Implications on Health Insurance
About the Medicare Levy Surcharge
About the Life Time Health Cover Loading
Government Rebate & Means Testing