Compare Private Health Insurance, Select and Cover

When selecting a private health insurance policy, it's important to consider your health needs, lifestyle, and financial situation. Younger, healthier individuals may opt for a basic hospital cover to avoid the Medicare Levy Surcharge, while families or older Australians might look for more comprehensive coverage to meet their healthcare needs.

The choice between hospital, extras, or combined cover should be based on a careful assessment of what health services you are likely to use, balanced against the premiums you are willing to pay. It's also wise to consider the flexibility of the policy, including the ability to upgrade or downgrade coverage as your needs change over time.

When sorting through your private health insurance options, it's helpful to have a good grasp of all of the technical language. Some of the other terms that you may wish to familiarise yourself with include:

• Waiting Periods: The duration an insured person must wait after purchasing a health insurance policy before they are eligible to claim benefits for certain treatments or services. Waiting periods are used to prevent individuals from signing up for health insurance only when they need expensive treatments and vary depending on the type of treatment.
• Benefit Limits: The maximum amount an insurance policy will pay for specific healthcare services or treatment categories in a given time period, such as a year. Once the benefit limit for a service is reached, the insured must cover any additional costs out-of-pocket.
• Medicare Levy Surcharge (MLS): An additional tax imposed on Australian taxpayers who do not have private hospital cover and whose income exceeds a certain threshold. The MLS is designed to encourage individuals to take out private hospital cover and thus reduce the demand on the public Medicare system.

Want to dive deeper into Private Health Insurance? Read through some additional material to help increase your understanding. State of the Health Funds Report 2022

Private health insurance offers coverage for health care costs in Australia, allowing individuals to be treated as private patients in both public and private hospitals. There are two main types of cover: hospital cover (for in-hospital treatments) and extras cover (for services like dental, physiotherapy, and optical).

Private health insurance coverage can provide the flexibility to choose your doctor and hospital, potentially reduce waiting times for elective surgery, and cover services not covered by Medicare, such as dental and physiotherapy.

Choosing the right private health insurance policy involves assessing your health needs, budget, and what you want covered. Start by determining whether you need basic, medium, or comprehensive cover and whether you need hospital, extras, or combined cover. Consider factors such as the services you wish to be covered (e.g., dental, optical, physiotherapy), whether you plan to have children, and any specific medical conditions you want to ensure are covered.

Hospital cover provides benefits for costs incurred as a private patient in a hospital. This can include accommodation fees, theatre fees for surgery, and part or all of the medical fees charged by doctors, anesthetists, and other specialists. The specific services covered and the level of cover can vary significantly between policies, so it's important to review your policy details to understand what is and isn't covered.

There are limitations to what private health insurance can cover. For instance, it generally does not cover out-of-hospital medical services that are covered by Medicare, such as consultations with a general practitioner (GP), diagnostic imaging, and tests. Moreover, there may be 'gaps' or out-of-pocket expenses for hospital treatments, where the insurance payment does not fully cover the doctors' or anesthetists' fees. Each policy has its own set of exclusions and restrictions, which should be carefully reviewed.

The Australian Government currently (as of January 2024) provides a rebate on private health insurance to help make premiums more affordable. The amount of the rebate depends on your age, income, and the type of cover. It can be claimed back either as a reduction in your insurance premiums or as a tax rebate when you lodge your annual income tax return. This initiative is designed to encourage more Australians to take out private health coverage.

The Medicare Levy Surcharge (MLS) is a tax imposed on Australian taxpayers who do not have private hospital cover and earn above a certain income threshold. The MLS is designed to encourage individuals to take out private hospital cover and, thereby, reduce demand on the public Medicare system. The surcharge ranges from 1% to 1.5% of your income, depending on how much you earn.

Yes, a significant advantage of private health insurance is the ability to choose your own doctor and hospital for your treatment (in most cases). This choice allows patients to select specialists they trust and facilities with reputations for high-quality care. However, whether you can be treated by a particular doctor or hospital will depend on whether they have an agreement with your health fund and if your insurance policy covers their services.

Waiting periods are the time frames you must wait after purchasing a policy before you can claim benefits for particular services or treatments. They prevent people from signing up for health insurance, claiming immediately for expensive treatments, and then cancelling their coverage. Waiting periods can vary, with common durations being twelve months for pre-existing conditions and obstetric services and shorter periods for other services.

Yes, if you have a pre-existing condition, there is usually a twelve-month waiting period before you can claim benefits for treatment related to that condition. A pre-existing condition is defined as any condition, symptom, or ailment that existed in any form prior to you taking out or upgrading your private health insurance. This waiting period applies to new members or those upgrading to a higher level of cover.

Many private health insurers offer gap cover schemes that can reduce or completely eliminate out-of-pocket expenses for in-hospital doctor's fees. To avoid or reduce gap payments, you should check if your insurer has a gap cover scheme and if your doctor participates in it. Additionally, it's wise to ask your doctor and hospital about potential out-of-pocket costs before proceeding with treatment. Some policies also offer no-gap or known-gap options, where the insurer has agreements with certain doctors or hospitals to cover the full fee or limit your out-of-pocket expenses.

The difference between public and private patients in Australia primarily revolves around the choice of healthcare provider and the speed of access to elective surgeries. Public patients use the public healthcare system, are treated by doctors appointed by the hospital, and cannot choose their treatment date, potentially facing longer waiting times for elective surgeries. Private patients, on the other hand, can choose their doctor and hospital for treatment, have the option for a private room, and often experience shorter waiting times for elective procedures. Being a private patient, either through private health insurance or by paying out-of-pocket, generally offers greater comfort and convenience.

If you cancel your private health insurance, you will no longer be covered for private medical treatment and may have to rely solely on the public health system for your medical needs. If you decide to rejoin private health insurance later, you may be subject to re-serving waiting periods for benefits that had previously been served. For those over 31, cancelling and then later rejoining health insurance can also result in a higher premium due to the Lifetime Health Cover loading. It's important to consider these factors and possibly seek advice before cancelling your policy.