Private health insurance - frequently asked questions

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

Page last updated: 04 October 2013

What is private health insurance?

What does private health insurance cover?

What are private health insurer obligations to members?

I’ve got private health insurance. Do I still have access to public healthcare?

What is private health insurance?

You can purchase private health insurance to cover some or all of the costs of healthcare as a private patient.

There are two types of private health insurance cover available, hospital cover and general treatment cover (ancillary or extras cover).

Hospital cover pays for some or all of the costs of hospital treatment as a private patient, including doctors’ fees and hospital accommodation. It applies when you are a private patient in a public or private hospital (or a day hospital facility).

General treatment cover helps with the cost of services such as physiotherapy, dental and optical treatment. Some private health insurers offer packaged products that cover both hospital and general treatment services.

Generally, the more extensive the private health insurance the greater the premium cost. When choosing your private health insurance it is important to make sure it suits your healthcare needs and budget. Private health insurers should provide you with the information to make an informed choice about the level cover that is appropriate for you.

What does private health insurance offer?

Private health insurance allows you to be treated as a private patient in a public or private hospital. This means that you may be able to choose the doctor and hospital you are treated in at a time that suits you.

Private health insurance also provides cover for services not covered by Medicare such as physiotherapy, optometry, general dental and podiatry services. Many people rely on private health insurance to access services they would otherwise be unable to afford.

Do I have to get private health insurance?

No. There is no requirement to purchase private health insurance.

If you don’t have private health insurance it doesn’t impact your access to Medicare. However you may be required to pay the Medicare levy surcharge if you earn over a certain amount and don’t have private health insurance hospital cover.

If you have private health insurance you are able to access the free public hospital system through Medicare by electing to be treated as public patient. You can also access certain subsidised or free out-of-hospital medical services under Medicare.

It’s important to note that you can’t access Medicare for procedures that aren’t considered clinically relevant by a doctor.

What does private health insurance cover me for?

If you purchase private health insurance hospital cover, you will be covered for some or all of the costs of being a private patient in a public or private hospital. The type of private hospital services you can receive depends on the hospital cover you purchase.

It’s recommended you check with you insurer if a treatment is covered by your private health insurance.

You can also choose to be treated as a public patient in a public hospital for free under Medicare.

Private health insurance general treatment cover (also known as ancillary or extras cover) can offer out-of-hospital services that are generally not funded by Medicare, such as:
  • dental treatment;
  • ambulance;
  • chiropractic treatment;
  • home nursing;
  • podiatry;
  • physiotherapy;
  • occupational therapy;
  • speech therapy; and
  • 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, 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 is called a ‘gap’.

Insurers can inform you whether they offer private health insurance that covers you for all or part of the gap. They can provide you with details of the doctors and hospitals they have agreements with to cover the gap.

Am I covered as soon as I take out private health insurance?

When you buy private health insurance or increase your level of cover you may have to wait some time before you are able to claim. The waiting period ensures people can’t make a claim and immediately drop their cover. This type of claiming would lead to increased premiums for everyone.

Am I covered for a condition that I had before I bought private health insurance?

If you were ill before you bought 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. It’s recommended you check with your private health insurer.

What can I do if I think my private health insurer 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 private health insurer, you should contact the Private Health Insurance Ombudsman on 1800 640 695.

Can a private health insurer refuse to insure me because I am elderly or chronically ill?

No. Private health insurers 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. Private health insurers can impose waiting periods for pre-existing ailments.

Can I change health insurer if I want to?

Yes. You can change private health insurer 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.

Can I change my level of cover?

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. This includes transferring to policies with lower excesses or gap fees.

If I go overseas, how can I avoid waiting periods and pre-existing ailment restrictions when I get back?

You can ask your private health insurer 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. When you return you can resume your private health insurance cover without having to re-serve any waiting periods.

While your cover is suspended, you will remain a member with your private health insurer 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 can not claim.

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

While your private health insurance hospital cover is suspended by your insurer you are considered to have hospital 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.

Suspension rules vary between private health insurers in relation to the length of time allowed and the grounds for granting the suspension.
For more information about the Medicare levy surcharge when travelling overseas, visit the overseas travel and the Medicare levy surcharge page.

My private health insurer won't suspend my membership, what can I do?

Suspension rules vary between private health insurers. If your private health insurer won't suspend your membership, you can check with other insurers to see if they are prepared to grant you a suspension.

For more information about private health insurers, visit the list of health funds page or call 1300 737 299.

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.

What if I fall behind in my contributions?

If you are less than two months behind in your contributions your private health 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 private health insurer may consider your membership to have lapsed. You should discuss this with your insurer.

Can I still access Medicare if I have private health insurance?

Yes. If you have private health insurance you are able to access the free public hospital system through Medicare by electing to be treated as public patient (only in a public hospital). You can also access certain subsidised or free out-of-hospital medical services.

It’s important to note that you can’t access Medicare for elective procedures, that is, procedures that aren’t considered clinically relevant by a doctor.

Can I access Medicare if I can't afford private health insurance?

Yes. If you don’t have private health insurance you can access free medical treatment in public hospitals under Medicare. You can also access certain subsidised or free out-of-hospital medical services.

Why do I have to pay the Medicare levy when I have private health insurance?

The Medicare levy is paid by most Australians pay to help fund our public health system. You will pay the Medicare levy regardless of your private health insurance hospital cover or income. It is taxed at 1.5 per cent of your salary.

The Government supports universal access by all Australians to public health services under Medicare, regardless of private health insurance status. People with private insurance can choose to use Medicare or private healthcare services.

Even if you elect to be treated as a private patient, you receive some Government subsidy.

Medicare funds 75 per cent of most medical services in private hospitals. The public health system also subsidises the cost of certain medicines under the Pharmaceutical Benefits Scheme.
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