Private Health Insurance FAQs
About private health insurance
What does private health insurance cover?
There are two types of private health insurance:
- Hospital insurance, which covers all or some of the costs of hospital treatment as a private patient including doctor’s charges and hospital accommodation.
- Extras insurance (also called ancillary), which covers treatments generally not available under Medicare like dental, optical, physiotherapy, chiropractic and acupuncture.
As a general rule, the more expensive the health cover you choose, the more hospital procedures and extras treatments will be included and the more money you’ll get back when you claim.
Why should I buy private health insurance?
Private health insurance offers you increased choice, convenience and flexibility.
With private hospital cover, you can be treated in a private or public hospital as a private patient. That 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 insurance also provides “extras” cover for services generally not included under Medicare like dental, optical, physiotherapy, chiropractic, remedial massage and acupuncture. Many people use their private health cover to get access to services they may otherwise not be able to afford.
And last, but certainly not least, buying private patient hospital cover can help high income earners to save on tax. If you’re single and earn over $93,000 (or a couple or family earning over $186,000), buying private hospital cover may help you to minimise your tax by avoiding having to pay the Medicare Levy Surcharge. Single parents and couples (including de facto couples) are subject to family income threshold.
What isn’t covered by private health insurance?
Private health insurance does not cover medical services provided out-of-hospital that are covered by Medicare. These include things like GP visits, consultations with specialists (in their rooms) and diagnostic imaging and tests.
Private cover also typically excludes things like elective cosmetic surgery and laser eye surgery.
Can I still be treated as a public patient if I have private health insurance?
As a public patient, you’ll receive free public hospital services if you’re entitled to Medicare, but will not be able to take advantage of any of your private cover benefits (like choosing your own doctor).
Am I covered as soon as I take out private health insurance?
When you first buy private health insurance, or when you upgrade to a higher level of cover, you may have to wait some time before you are able to claim. These waiting periods apply to both hospital and extras.
Most private health funds recognise the waiting periods you’ve served with your previous insurer. That means that when you transfer to a level of insurance with the same (or lower) level of cover, as long as you transfer within 30 days of leaving your previous fund, you won’t need to re-serve waiting periods that you’ve already completed.
Am I covered for a condition that I had before I took out private health insurance?
If you were ill before you bought private hospital insurance, even if you were unaware of your illness, you’re considered to have a pre-existing condition. That means you’ll need to serve a waiting period before you are covered for any treatment associated with your illness.
A pre-existing condition is any illness, ailment or condition where the signs or symptoms existed up to six months before and on the day you joined your health fund or upgraded your cover, irrespective of whether you were aware of it.
If you make a hospital claim within the first 12 months after joining your health fund, you may be asked to provide a medical report so the fund can determine whether or not the treatment relates to a pre-existing condition.
After you finish serving your waiting period, you’ll receive full benefits under your policy. Most health funds require you to have continuous cover, and may include time served with a previous insurer if your previous policy was for an equal or higher level of cover.
Can a health fund refuse to insure me because I am elderly or chronically ill?
No. Private health insurers are not allowed to refuse membership on the grounds of health status, age or claims history.
And unlike other types of insurance, they must charge everyone the same premium for the same insurance policy. This is called community rating, and it protects you from having to pay higher premiums if you make a claim, get older or get sick. However, you may need to pay an additional government charge, called the Lifetime Health Cover (LHC) levy, if you delay taking out health cover until after the age of 30.
If you are new to health insurance or are switching to a higher level of cover, you may need to serve a waiting period for pre-existing conditions before you can make any claims.
Will private hospital insurance cover 100% of my medical expenses?
The Australian Government sets a schedule of fees (called the Medicare Benefits Schedule or MBS) for treatments by doctors in a hospital or day surgery. Medicare covers you for 75% of this schedule fee and your private health insurer pays the remaining 25%.
A “gap” can occur if your doctor or specialist charges more than the MBS fee. Any amount that isn’t covered by Medicare or your health fund comes out of your pocket.
You can avoid (or reduce) out of pocket costs by choosing a health fund that offers a gap cover scheme. These health funds can provide you with a list of all doctors and specialists who participate in their gap scheme, so that you can choose to be treated by someone who charges either no gap or else a known low gap payment. Talk to your doctor when planning any surgery, and ask whether the gap scheme applies to your case and to make sure that you fully understand what your out-of-pocket costs will be.
Joining a health fund
What should I look for when choosing health insurance?
When it comes to private health insurance, you’ll find that cheapest does not always equal best value. In fact, paying just a little extra each month can actually save you money, because you may be covered for more services that you’ll actually use.
When shopping for health insurance, some of the things you should look at include:
- What services are included and excluded?
- What restrictions apply to your cover?
- How much can you get back for the services you’re most likely to use?
- What waiting periods apply before you can claim?
- How easy is it to make a claim?
- Can you still see your favourite doctors and specialists?
- Do you still get the same amount back if your doctor/specialist isn’t part of the fund’s preferred “network” of providers?
- What private hospitals can you go to?
- Is a “gap cover” scheme available?
- What excess is payable for hospital visits and how many times each year does an excess apply?
Is it easy to transfer between funds?
Yes. You can change insurance policies at any time: from one fund to another or even changing to a higher or lower level of cover within the same health fund.
You’ll receive continuous cover if you transfer to Australian Unity within 30 days of leaving your previous fund. And if you switch to an equal (or lower) level of cover, you won’t have to re-serve any waiting periods you’ve already completed.
The old fund will provide your new fund with a transfer certificate, which provides details about your level of cover, waiting periods already served, a history of recent claims, and any Lifetime Health Cover loading that applies.
This information may also be used to adjust the annual and lifetime claim limits on your new policy. For example, if you’ve made $900 worth of orthodontics claims on your old cover, and your new policy has a $2400 lifetime claim limit, that $900 will be deducted from your new policy ($2400 - $900 = $1500) to reflect your true available limit.
Find out more about switching to Australian Unity.
Will I have to serve waiting periods?
When you take out private health insurance for the first time, or when you increase your level of cover (including reducing your excess level), you’ll need to serve a waiting period before you can claim on some treatments.
This helps to keep insurance premiums lower because it stops people from making a large claim shortly after joining, and then cancelling their membership straight away.
The Australian federal government sets the maximum waiting periods that funds can impose for hospital treatment, including 12 months for pre-existing conditions and for obstetrics (pregnancy), and two months for rehabilitation and palliative care.
Do I get my money back if I change my mind and cancel my policy?
How often should I review my cover?
This is especially important if your situation changes, for example if you decide to start a family or if someone in your family has developed a health issue.
Can I change the level of cover I have?
If you change to a higher level of cover, you will usually need to serve a waiting period before you can claim on the increased services or limits. This includes transferring to covers with a lower level of hospital excess.
Can my health fund change the level of cover I have?
Yes. Your health fund can change both the price you pay for your policy and also the benefits or the terms and conditions of your policy.
In making these changes, all health funds (including us) are bound by the Australian Consumer Law, the Private Health Insurance Act 2007 and associated rules and the industry Private Health Insurance Code of Conduct.
Premiums usually change once a year on 1 April, and unfortunately due to things like an increase in the cost of healthcare and people living longer, they usually go up.
We may at any time make changes to your cover. This may include adding or reducing the benefits or services available to you.
We will ensure that we provide you with appropriate notice of these changes in accordance with the Private Health Insurance Act 2007, the Australian Consumer Law and the Private Health Insurance Code of Conduct prior to these changes taking effect.
If you do not wish to continue under the changed cover, you have the option of transferring to a different cover or cancelling your membership. If you do cancel, you’re entitled to a refund of any premiums paid in advance
How long can children remain on family policies?
With Australian Unity, you can include your children (including adopted or foster children) as dependants until they turn 31, as long as they are not married or in a de-facto relationship. The type of family cover you need will depend on whether any children aged between 23-31 are full-time students.
There may be differences in the way that health funds classify dependants, so it’s a good idea to check the details with your chosen fund.
Do I need to organise separate Ambulance cover?
The answer to this one varies depending on what level of health cover you have and where you live.
Where you are covered for emergency ambulance, you are covered for the transportation to hospital provided that the transport is coded an invoices as an emergency by a State Ambulance authority. In addition, you may be covered for ambulance attendances, where an ambulance comes to you but you are not taken to hospital.
Check your product Fact Sheet for more information about your cover.
- Queensland and Tasmania have state-based ambulance schemes where residents are fully covered.
- NSW and ACT provide ambulance cover if you have hospital or ambulance-only insurance. Send any ambulance accounts to your health fund, who will then approve and forward the accounts to the applicable ambulance transport scheme.
- For everyone else, we recommend that you purchase an ambulance subscription with your applicable State Ambulance provider (where available) so that you’re covered in non-emergency situations.
What should I do if I feel that my health fund is treating me unfairly?
If you are unhappy with any aspect of the services you receive from your health fund, the first step is to contact the health fund directly to try and resolve the issue. You can find out more about Australian Unity’s complaint resolution process here.
If you are not able to resolve the issue with your health fund, you can contact the Private Health Insurance Ombudsman (PHIO).
The PHIO is an independent office, appointed by the Federal Government, whose services are free to all health fund members. The Ombudsman handles enquiries, suggestions and complaints, and will assist you in resolving a dispute. You can find out more on the PHIO website at ombudsman.gov.au.
Surcharges, loadings and rebates
Can I receive the Australian Government Rebate on Private Health Insurance?
Most Australians are eligible to receive a rebate from the Australian Government to help reduce the cost of their health cover (for both hospital and extras covers).
The rebate amount varies depending on eligibility, age and income levels, with levels being adjusted by the government on 1 April each year.
Do I have to pay the Lifetime Health Cover (LHC) loading?
If you're 31 or over, you might have to pay an extra 2% loading for each year you've gone without hospital cover.
The Lifetime Health Cover (LHC) loading was introduced by the Australian Government in July 2000 to encourage people to take out private hospital insurance at a younger age and maintain it over time.
Find out whether LHC affects you.
I’ve recently immigrated to Australia. Do I have to pay LHC loading?
As a new migrant to Australia, you can avoid paying the LHC loading by taking out private hospital cover before 1 July following your 31st birthday or before the first anniversary of your full Medicare registration (that is, when you are eligible for a blue or green Medicare card).
If you miss the 1 July cut-off date, you will have to pay 2% more for each year you are aged over 30 when you take out private health insurance.
Find out more about LHC.
Do I have to pay the Medicare Levy Surcharge (MLS)?
If you’re single and earning over $93,000, or a couple or family earning over $186,000, buying private hospital cover may help you to minimise your tax by avoiding having to pay the Medicare Levy Surcharge (MLS). Single parents and couples (including de facto couples) are subject to family income threshold.
If it applies to you, the MLS adds a surcharge of between 1% and 1.5% of your income* to your tax liability if you don’t have private hospital cover.
The MLS is calculated on a daily rate, so if you have private hospital cover for only part of the financial year, you may have to pay MLS for the remaining part of the year. Find out more about the Medicare Levy Surcharge.
*For more information, visit the ATO website.
Do I still have to pay the Medicare Levy if I have private health insurance?
Most Australians pay 2% of their taxable income towards the Medicare Levy, which is used to help fund our public health system. This is a levy that must be paid, regardless of whether you have private health cover.
The federal government uses this money to pay for health services including:
- GP visits, consultations with specialists (in their rooms) and diagnostic imaging and tests—none of which are covered by private insurance
- Hospital treatments and accommodations, paying 100% of the scheduled fees for public patients, and 75% for private patients (who have the remaining 25% paid for by their private insurer)
Using your cover
When do I have to pay an excess/co-payment?
Depending on your level of cover, you may need to pay an excess and/or co-payments for your hospital admission. These are an amount you agree to pay upfront towards your hospital cost, in exchange for a lower premium for the cover.
Check your policy to see the excess details for your hospital cover:
- Generally excesses will apply once per person admitted to hospital per calendar year
- Co-payments apply per day, and may be capped up to a maximum amount per admission
- Excesses and co-payments may be waived for dependant admissions, Accident related admissions or same day procedures - refer to your product Fact Sheet.
Excesses are only ever payable if you are hospitalised. They do not apply to extras.
Am I still covered if I fall behind in my payments?
That depends on how far behind you fall.
If you owe less than 60 days, Australian Unity will allow you to pay your outstanding contributions and maintain continuity of cover. That means your private health insurance will be considered to be continuous during the period.
After 60 days your membership is considered to have lapsed and you will no longer be covered.
Am I covered if I go overseas?
No, your Australian private health insurance is only effective in Australia.
We recommend that you take out travel insurance whenever you travel overseas. The good news is that as an Australian Unity member, you’re entitled to a 10% discount on travel insurance.
Can I suspend my cover if I go overseas (so that I don’t have to re-serve waiting periods)?
Yes. Australian Unity members with hospital cover (or hospital + extras cover) can suspend their membership if they go overseas for two months or more, and then reinstate it when they return without having to re-serve waiting periods.
You must have been an Australian Unity member for at least 1 month, and can suspend your membership for a minimum of 2 months and maximum of 24 months.
Find out more about suspending your membership.
Can someone else manage my membership for me?
Yes. If you would like a partner, friend or relative to speak to Australian Unity on your behalf and manage your membership, you can either:
- Fill out this delegated authority form
- Call us on 13 29 39
The person you nominate will then be able to access and update your personal information—both over the phone and online. You will remain the only one who can change your level of cover or cancel your insurance.
What cover is right for you?
Health insurance is not a one-size-fits-all proposition.
Needs change depending on things like lifestyle, life stage, health issues and financial situations. That means that a single 30-year-old looking for basic hospital and extras cover will have a different list of requirements to a young couple planning on having their first child.
Choosing health cover can be confusing and even a bit overwhelming. That’s why most health funds provide tools on their websites to help you choose the cover that’s right for you. Or if you prefer to talk to someone, you can get advice over the phone. (You can call Australian Unity on 1300 650 162.)