Better health and ageing for all Australians

Private health insurance

Private health insurance - frequently asked questions

This page contains frequently asked questions by consumers about Private Health Insurance.

In this section:

What is Private Health Insurance?
You may purchase private health insurance to cover all or some of the costs of health care as a private patient.

There are two types of private health insurance cover available: hospital cover andgeneral treatment cover (ancillary or extras cover).

Hospital insurance covers all or some of the costs of hospital treatment as a private patient including doctor's charges and hospital accommodation. This applies when you are a private patient in a public or private hospital or day hospital facility.

General treatment cover helps with the cost of non-medical services such as physiotherapy, dental and optical treatment. Some funds offer packaged products that cover both hospital and general treatment services.

Generally, the more extensive the health cover, the greater the premium cost. When choosing your private health insurance, it is important to make sure it suits your particular needs, as well as your budget. Insurers should provide you with the information to make an informed choice about a private health insurance cover that is appropriate for you.
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What are the Benefits of Private Health Insurance?
Private health insurance allows you to be treated in a private or public hospital as a private patient. This means that you may be able to choose the doctor that treats you, the hospital you are treated in and a time for treatment that suits you. Private health insurance also provides cover for services not covered by Medicare such as physiotherapy, dental, optometry and podiatry services. Many people rely on private health insurance to access services they would otherwise be unable to afford.

The decision to purchase private health insurance is a personal choice. People who cannot afford the premiums for private health insurance or do not wish to take out private health insurance for any other reason, continue to have the right to access the public hospital system through Medicare on the basis of clinical need.

Do I have to have private health insurance?
No. The decision to purchase private health insurance is a personal choice. People who cannot afford the premiums for private health insurance or do not wish to take out private health insurance for any other reason, continue to have the right to access the public hospital system through Medicare on the basis of clinical need.

Please note that even if you have private health insurance, you can still elect to be treated as a public patient in a public hospital under Medicare.

What does private health insurance cover me for?
If you purchase hospital cover with a private health insurer, you will be covered for some or all of the costs of being a private patient in either a public or private hospital. Alternatively, you can still be treated as a public patient in a public hospital at no charge to you under Medicare, should you wish.

The exact amount of hospital treatment you are covered for depends on the level of hospital cover that you purchase, as well as the hospital and doctor you choose and whether they have an agreement with your insurer.
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You can also purchase general treatment cover (also known as ancillary or extras cover) that may offer you cover for services out of hospital that are generally not funded by Medicare, such as:
  • dental treatment
  • ambulance
  • chiropractic treatment
  • home nursing
  • podiatry
  • physiotherapy
  • occupational therapy
  • speech therapy
  • glasses and contact lenses

What doesn't private health insurance cover?
Private health insurance does not cover medical services that are provided out of hospital and which are covered by Medicare. These services include GP visits and consultations with specialists, in their rooms, and diagnostic imaging and tests.

Private health insurance may not cover the total cost of the doctors' services provided to you in hospital, which in turn may leave you with an out of pocket expense. This out of pocket expense is referred to as a ‘gap’.

Individual health funds can inform you whether they offer a product that covers you for all or part of the gap, and will provide details of the doctors and hospitals with which they have agreements to cover the gap. You can check with your health fund to see what it offers.

Am I covered as soon as I take out private health insurance?
When you join a health fund or increase your level of cover you may have to wait some time before you are able to claim benefits. This waiting period protects you and others in your health fund by making sure that people can not join a health fund solely for the purpose of making a claim, and then dropping their cover. This type of "hit and run" behaviour results in increased premiums for everyone.
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Am I covered for a condition that I had before I took out private health insurance?
If you were ill before you took out private health insurance, you will have to serve a pre-existing ailment waiting period before you are covered for treatment associated with your illness. This waiting period is usually 12 months, however, you should check this with your fund.

Does my income affect whether or not I have to have private health insurance?
No, the decision to purchase private health insurance is entirely up to you. However, if you are eligible for Medicare, and you earn an annual income in excess of $77,000 for singles and in excess of $154,000 for couples/families (with family income being adjusted by $1,500 per annum for each child after the first), you will be required to pay the Medicare Levy Surcharge if you do not have an appropriate level of private health insurance. This Medicare Levy Surcharge is 1% of your income. The surcharge is administered by the Australian Taxation Office who can be contacted on 13 28 61 or http://www.ato.gov.au.

Can I still access Medicare if I have private health insurance?
Yes, even if you have private health insurance you are able to access the public hospital system through Medicare.

What if I can't afford private health insurance?
If you cannot afford the premiums for private health insurance or do not wish to take out private health insurance for any other reason, you can continue to access the public hospital system through Medicare on the basis of clinical need.

What can I do if I think my health fund has treated me unfairly?
If you feel that you have been treated unfairly, or you are unhappy with the service and information provided by your health fund, you should contact the Private Health Insurance Ombudsman which is established to assist consumers in these situations. The free call phone number is 1800 640 695.
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What are the contact details of the registered health funds?
The contact details for health insurers can be found at privatehealth.gov.au, and the Private Health Insurance Administration Council (PHIAC) website details all registered health funds within each State. It also provides contact details for each fund and, if they have a website, a link to each fund's website. Contact details for health insurers can also be found in the Yellow Pages.
If I have private health insurance, do I have to use my private health insurance, or can I still go into hospital as a Medicare patient?
Even if you have private health insurance, you are still able to be treated as a public patient in a public hospital under Medicare at no charge, should you wish to do so.

Can a health fund refuse to insure me because I am elderly or chronically ill?
No. Health funds are not allowed to refuse membership to people on the grounds of health status, age or claims history and must charge everyone the same premium for the same insurance policy. Health funds can impose waiting periods for pre-existing ailments.

Why do I have to pay the Medicare Levy when I have private health insurance?
The Government supports universal access by all Australians to public health services under Medicare, irrespective of private health insurance status. People with private insurance can therefore choose to use Medicare or private hospital services depending upon their particular health needs.

In addition, privately insured patients using private hospital services still draw substantially upon Medicare as well their insurance. For example, Medicare funds 75% of the Medical Benefits Schedule (MBS) fee for privately insured in-hospital medical services and also funds 85% (MBS) rebate on out-of-hospital medical services (e.g. GP visits) for all Australians and the Pharmaceutical Benefits Scheme (which subsidises the costs of pharmaceuticals).

Health insurance benefits may also not cover the total cost of hospital treatment, which in turn can result in an out-of-pocket expense. This out-of-pocket expense is referred to as a gap.

To remove the requirement that privately insured patients pay the Medicare Levy would therefore be inequitable.
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Why do health insurers impose waiting periods on new members?
When you join a health fund or increase your level of cover you may have to wait some time before you are able to claim benefits. This waiting period protects you and others in your health fund by making sure that people can not join a health fund solely for the purpose of making a claim, and then dropping their cover. This type of "hit and run" behaviour results in increased premiums for everyone.

Can I change health insurers if I want to?
Yes. You can change insurers at any time. However, if you change to a higher level of cover you may have to serve a waiting period before you can claim benefits at this higher level.

Can I change the level of cover I have?
Yes. You can change insurance policies at any time. However, if you change to a higher level of cover you may have to serve a waiting period before you can claim benefits at this higher level. This includes transferring to policies with lower excesses or co-payments.

If I go overseas, how can I avoid waiting periods and pre-existing ailment restrictions when I get back?
You should ask your health fund if they are prepared to suspend your health cover while you are overseas. Suspending your membership allows you to stop paying your premiums for the time that you are overseas and then return to private health insurance at the end of your suspension period without having to re-serve any waiting periods.

If you have not served your total waiting period or pre-existing ailment waiting period at the time your suspension is granted, you will have to serve the rest of your waiting period when you resume contributions at the end of your suspension period.

Suspension rules vary between private health funds in relation to the length of time allowed and the grounds for granting the suspension. If you are still overseas at the end of the agreed suspension period granted by your health fund and they are unable to extend the suspension, you can check with other funds to see if they are prepared to grant a further suspension or you can resume paying your premiums from overseas until you return to Australia.

While your private health cover is suspended by your health fund, you are considered to have private health cover for Lifetime Health Cover purposes. You will not be required to pay any age-based loading on your premium provided you resume your premium payments at the end of the agreed suspension period.
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What is a suspension?
Most health funds allow their members to suspend their private health insurance in certain circumstances, eg. when going overseas.

However, suspension rules vary between private health funds in relation to the length of time allowed and the grounds for granting the suspension.

While your cover is suspended, you will remain a member of the health fund and you will not be required to pay premiums. However, you will not be covered during the period that your membership is suspended. This means that you cannot claim any benefits in the period that your cover is suspended.

If a health fund agrees to grant you a period of suspension, you will not be required to serve further waiting periods or pre-existing ailment waiting periods (except where any waiting periods or pre-existing ailment waiting periods were not completed at the time of the suspension), provided you resume your premium payments at the end of the agreed suspension period.

If you are unable to suspend your membership, you may be able to lapse your cover without penalty under the Lifetime Health Cover period of absence provision.

My health fund won't suspend my membership, what can I do?
Suspension rules vary between private health funds. If your health fund won't suspend your membership, you can check with other funds to see if they are prepared to grant you a suspension.

Information relating to the various insurers can be found at privatehealth.gov.au. The Private Health Insurance Administration Council (PHIAC) website also details all registered health funds within each State which provides contact details for each fund and a link to each fund's websites.

If you are unable to suspend your membership, you may be able to lapse your cover without penalty under the Lifetime Health Cover period of absence provision. Under Lifetime Health Cover members are able to drop their cover for a cumulative period of 1094 days absence, without paying any additional loading on their premium.

What if I fall behind in my contributions?
If you are less than two months behind in your contributions, your insurer has to allow you to pay your outstanding contributions and maintain continuity of cover. This means that your private health insurance will be considered to have been continuous during this period.

If you are more than two months behind in your contributions, your insurer would most likely consider you not to be a member of that fund. You should discuss this with your insurer.

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