Excess levels explained

An excess is part of many types of insurance policies; from vehicles to home and contents, and of course, health insurance.

When buying health cover it is important to make the right decision, and a major part of this decision is the amount of excess you choose to pay.

With the Australian Government Private Health Insurance reforms coming into effect, the maximum excess levels that health funds are permitted to offer members has increased. This means that, on selected Australian Unity products, you have the option to pay up to a $750 excess for singles and up to $1500 for couples and families when going into hospital. Much like how car insurance works, a higher excess gives you the opportunity to pay a lower premium.

Depending on your circumstances, a higher excess may be the right choice for you, but everyone’s needs are a little bit different, in life and private health insurance!

Let’s take a look at the different levels of excess and what you should consider when making a decision for you and your family.

Q: What should you consider when making a decision about your excess?

A: There are a lot of things to think about when deciding which excess option is right for you. When considering a higher excess, like $750, compared to a lower excess, like $250, some important factors are:

  • How likely is it that you will need to go to hospital?
    Consider your current circumstances and how likely it is that you or members of your family will need to go to hospital. For example if you know you’ll go to hospital every year, you may want the lowest excess available for your cover.

    It is also important to be aware that if you decide to change from a higher to a lower excess amount a 12-month waiting period applies before the lower excess applies for hospital admissions that are for pre-existing conditions.
  • How much can you afford to pay up front if you’re admitted?
    A higher excess option, like $750, is a great way to reduce the ongoing cost of your private health insurance without losing cover for important services. However, if you don’t have much disposable income and think it will be hard to come up with $750 on short notice, a lower excess may be more manageable for you.

Family circumstances and likelihood of being admitted for a day procedure are also important to consider. For example, some covers may apply a lesser excess for day procedures versus overnight stays and other covers may not charge an excess for dependants.

Q: How does the $1500 excess work for couples/families?

A: Different covers each have different rules regarding how an excess will be payable. However, in general, a $1500 excess for couples and families is payable in two $750 excesses each calendar year. For some covers this means a $750 excess is payable once per adult per year, and it is waived for child dependants. For other covers, the $750 excess is payable on the first two admissions each year, regardless of who on the policy was admitted. As always, it’s important to check your product fact sheet to understand exactly how your excess will apply, particularly for couples and families policies.

It’s important to get the right cover to suit your circumstances. If you are unsure how the excess works on your cover, or whether your current excess level is right for you, contact us on 13 29 39 and we can talk you through your options.