Health Insurance Facts

The choice to join a Private Health Insurance Fund is an individual choice. By joining a Private Health Insurance Fund you gain additional cover for some services not covered by Medicare. For example hospital expenses in either a private or public hospital, physiotherapy, dental or ancillary services. Private Health Insurance allows you to choose your doctor, what public or private hospital you will be admitted to and maybe even when you are admitted.

Comparison of Costs

The cost of Private Health Insurance differs greatly depending on what services you wish to be covered for and whether you take out insurance as an individual, couple or family.

At the time of writing (January 2017) the average cost per year for an individual to be covered by Private Health Insurance is approximately $2,500. At Toowong Private Hospital the cost of an admission in a shared room for an individual who is uninsured is around $680 per night. The average length of stay for treatment is approximately 14 days, which means that an admission would cost the individual $9,520. This estimated charge excludes other additional costs that would be normally be covered by Private Health Insurance that would be routinely incurred during an admission including items like to Doctor Fees, Procedural fees and medication.

Therefore, it is important for an individual to weigh up their options between being self funded or taking out Private Health Insurance.

Questions to ask a Private Health Insurance Fund

It is important to understand exactly what is covered with your Private Health Insurance. There are a large amount of options available to customers. For example, you can purchase hospital cover, ancillary/extras cover, or both. Some items are generally not covered by standard policies for example neonatal care and psychiatric care, therefore it is crucial that you specify exactly what you want covered, and ask what items are excluded from the policy you wish to purchase.
It is also important to ask if Psychiatric care if fully covered or only covered at a Default rate. Coverage at Default rate, which is becoming more common in health insurance policies even at the top levels can often result in large additional payments when you are admitted to a Private Hospital. This is because default rates are only designed to subsidize the costs of treatment in a Public hospital setting.
Waiting periods are generally imposed on individuals taking out new health insurance and they vary in length. Government legislation has stated that waiting periods for hospital treatment that is psychiatric care cannot exceed 2 months. It does not matter whether the illness was pre-existing either, health insurance funds cannot legally impose a waiting period of more than 2 months for this kind of hospital care.
Insurance providers often charge excesses, co-payments and impose limits on health care services. You should ask the Health Fund Provider what out-of-pocket expenses you will be required to pay and the exact amount and frequency (for example whether you pay on only the first visit or every hospital stay) of these expenses.
It is important to find out what hospitals have agreements with the Private Health Insurance Provider. The purchase of 100% hospital cover does not guarantee you won’t have any out-of-pocket expenses for a private hospital visit. If a private hospital does not have an agreement with the health fund, not all expenses may be covered and you could incur some out-of-pocket expenses. Typically, if there is an agreement in place, health funds will generally reimburse 100% of the costs.

Commonly Used Terms

Benefits are the dollar amount or the services provided to you from your Private Health Insurance Provider. Benefits are received in either a calendar year, 12 months from the date of taking out the Health Insurance Policy or in a financial year (1 July to 30 June).
This is a type of coverage for Mental Health Admissions that can often be found in a Private Health insurance policy. This type of benefit was originally designed as a partial reimbursement of the costs associated with treatment in a Public Hospital setting. This level of coverage will normally result in a significant additional payment, payable by the patient,when this level of coverage is applied to a Private Hospital admission.
A co-payment is a set amount you agree to pay each time a service is provided. For example your policy may state that you have to pay $50 a night for every day that you are in hospital. Co-payments usually have a maximum set amount that an individual is required to pay a year.
An excess is an amount that an individual may agree to pay towards hospital treatment in exchange for lower premiums. You may be required to pay this amount every time you have hospital treatment or it may only be required the first time. An excess is payable by an individual before health fund benefits are payable.
These are set benefits that are provided by Private Health Insurance Providers that are not covered by Medicare. Examples of these are dental, optical and chiropractic. These extras are purchased on top of hospital cover and differ between each fund and type of policy.
Premiums are the payments made by an individual to the Health Insurance Provider in return for Health Insurance. These premiums may be paid weekly, fortnightly, monthly, quarterly, bi-annually or annually.
All Private Health Insurance Funds have waiting periods an individual is required to wait before the Private Health Insurance Fund will pay benefits. These waiting periods vary between providers.