What are the potential risks of taking on a lower level of insurance?
Health insurers develop a variety of policies to meet the needs of a broad range of consumers. There is demand from consumers for more affordable policies, particularly from younger people who may be taking out a policy for the first time and from people who are purchasing health insurance primarily for tax purposes. One way insurers can reduce the cost of a policy is by restricting or excluding certain treatments on the policy.
As a consumer, if you choose to take out a policy that has restrictions or exclusions on some services, you are taking on a higher level of risk in exchange for a lower premium. It is wise to consider taking out a more comprehensive level of hospital cover and choose a higher excess or lower level of extras cover, rather than a restriction or exclusion on the policy. It is important to note that if you need to be treated as a private patient in a public hospital, public hospital waiting lists still apply.
If you have purchased a policy with exclusions or restrictions and then require these services, you may have to wait to receive these services as a public patient, or upgrade to a higher level of hospital cover and complete a 12-month waiting period for pre-existing conditions to be covered as a private patient.
So by choosing a cover that does not suit your needs you could be out of pocket significantly, need to wait a considerable amount of time for treatment or elect to pay for the procedure or service yourself to be able to access services quickly.
How often should I review my Private Health Insurance policy?
It is also important to review your policy every year, to ensure that it will continue to meet your needs in future. If you do take out a policy with restrictions or exclusions, make sure you understand what these restrictions mean.
How do I know what I am covered for?
Health insurers are required to send members a Standard Information Statement once a year. This is a one page summary of the main features of your policy, including restrictions or exclusions. When you receive your SIS is a good time to review your policy and make sure it will meet your needs in
the future.
It’s also important to read all the material your insurer sends you, particularly letters or emails about your cover.
What do you mean by restrictions and exclusions?
We can’t always foresee what services we will need and when we will need them, so it’s important to understand any restrictions or exclusions that apply to your policy.
Restrictions- you agree to receive only limited benefits for certain services
If your policy has restrictions for some conditions, you will be covered for treatment for those conditions, but only to a very limited extent.
For example, if your policy restricts hip replacement surgery, you will only be covered for this as a private patient in a public hospital. In some cases, hospital cover may be limited to shared ward only and will not cover the full cost of a private room in a public hospital.
If you go into hospital as a private patient in a private hospital, your health fund will not pay any benefits towards the theatre fees and only a small benefit towards your accommodation fees. This means you will face considerable out-of-pocket costs for your treatment.
If you receive treatment in a private hospital, your health fund and Medicare will still contribute towards your medical fees. This includes, but is not limited to, paying a benefit towards your treating doctor, your anaesthetist, pathology and x-rays, and other medical services you receive in
hospital. If any of your treating doctors charge a gap for their services, you will be responsible for paying these costs yourself.
Exclusions- you agree not to be covered at all for certain services
If your policy has exclusions for some conditions, you will not be covered at all for treatment as a private patient in either a public or private hospital for those conditions.
This means that if you choose to be treated as a private patient, you will be responsible for the full hospital bill and a large portion of the medical fees for services you receive in hospital. This applies in both public and private hospitals if you are admitted as a private patient.
For example, if your policy excludes cardiac services and you go into hospital as a private patient for cardiac surgery, your health fund will not pay any benefits towards your hospital and medical costs. This means you will face considerable out-of-pocket costs for a private patient admission.
If you do elect to be treated as a private patient for an excluded service, Medicare will still pay a small benefit toward your medical fees.
What types of services might be are restricted or excluded?
The following is a list of the most common procedures that can be restricted or excluded:
- Cardiothoracic services: This can include heart & lung investigations such as angiographies and surgery such as angioplasty, coronary artery bypass, cardio ablation and treatment of coronary heart disease.
- Plastic and reconstructive surgery: This is defined as medically necessary treatment that can include skin grafts following burns, surgery to correct congenital abnormalities such as repair of cleft palates or cleft lips, nasal deformities
causing breathing problems, surgery following traumatic injuries including the repair of facial bone fractures and breaks, surgery following removal of cancers or tumours such as breast reconstruction following mastectomy, skin grafts and skin flap surgery following tumour removal.
- Psychiatric services: This includes drug and alcohol rehabilitation and treatment of mental health issues such as eating disorders, schizophrenia, depression and anxiety.
- Cataract and eye lens procedures: Eye surgery to correct impaired vision.
- Pregnancy and birth related services: Includes the birth of a baby as well as any hospital admission relating to pregnancy.
- Assisted reproductive services: Includes infertility services such as In Vitro Fertilisation (IVF) and Gamete intra-fallopian transfer (GIFT).
- Hip and knee replacements: Joint replacement surgery.
- Obesity Surgery: Including gastric banding and bariatric surgery which is performed to assist in weight management.
Sources
PHIO and private health.gov
All information contained in this article is intended for general information purposes only. The information provided should not be relied upon as medical advice and does not supersede or replace a consultation with a suitably qualified medical practitioner. CBHS endeavours to provide independent and complete information, and content may include information regarding services, products and procedures not covered by CBHS Health Cover policies. For full terms, click here.