Considering private hospital cover? We share everything you need to know to find the right policy for you.

If you’re considering health insurance for peace of mind or wanting to avoid unnecessary tax penalties, Hospital Cover might be just the solution.

While our public health system is one of the best in the world, hospital cover is designed to pay benefits toward the cost of your treatment in hospital. It can provide you with choice and flexibility when it comes to your health needs, such as where and when you want to be treated in a private hospital and by who.

How does Hospital Cover fit in with private health insurance?

In Australia, there are three major types of cover when it comes to health insurance: Hospital Cover, General Treatment Cover (also referred to as Ancillary or Extras Cover) and Ambulance Cover.

Hospital cover helps cover the cost of your medical treatment as a private patient in a hospital. This means, you’re covered for things like your treatment and hospital accommodation.

Taking out hospital cover will not only give you the benefits of being treated as a private patient, high-income earners can avoid the Medicare Levy Surcharge (MLS). This means you’ll spend less paying the tax man and more on looking after your health.

What are the main types of hospital cover?

Hospital cover policies typically fall into 4 categories that will dictate what’s covered and what’s excluded.

  • 1. Public hospital cover

    Public hospital cover will provide you with minimum benefits in a public hospital setting only. Public waiting lists for treatment will still apply.

  • 2. Basic private hospital cover

    You’ll receive private hospital treatment and avoid the public waiting lists with basic hospital cover. You’ll also get to choose your own doctor

  • 3. Medium private hospital cover

    With medium private hospital cover, you’ll receive all the features of basic cover with added benefits including heart surgery, your choice of doctor, non-cosmetic plastic surgery, palliative care, psychiatric services and rehabilitation.

  • 4. Top private hospital cover

    Take out top private hospital cover and you’ll be covered for all medical services where Medicare issues a benefit.

What does private hospital cover include?

The benefits you’ll receive from your private hospital policy will depend on the level of cover you choose. In Australia, you could be covered for more than 5,000 different medical treatments!

If you take out top private hospital cover, you’ll typically be covered for the following:

  • Private hospital
  • Ambulance services
  • Shoulder and knee reconstruction
  • Knee and hip replacement
  • Appendicitis
  • Tonsils and adenoids
  • Wisdom teeth removal
  • Colonoscopy
  • Palliative care
  • Rehabilitation
  • Open heart and bypass surgery
  • Obstetrics and fertility treatment
  • Plastic and reconstructive surgery
  • Major eye surgery
  • Renal dialysis
  • Other hospital services where Medicare will pay a benefit.

While many people may never need some of these treatments or surgery, for others it can be incredibly important for their long-term health and overall wellbeing.

If you think hospital cover might be for you, why not get started on a quote and see what type of cover suits your lifestyle.

Once you’ve decided on the type of cover you’re looking for, you can easily compare policies with our online comparison tool.

By comparing Members Own Health funds, you can be assured you’ll be getting more benefits and better coverage. That’s because Member Own Health funds are working solely for their members. Our funds invest a higher percentage of your premiums to improve services and while putting your needs and interests first.

In fact, over one million Australians are already with one of our not-for-profit or mutual funds.

What may not be covered under hospital insurance?

The exclusions and restrictions of hospital cover will vary from one policy to the next and depend on the health fund you choose. Checking what’s not covered under your chosen policy will help you ensure the cover matches your individual health needs and avoid any nasty out-of-pocket surprises if you do need treatment or surgery.

Typically, what’s not covered under hospital insurance are treatments that occur outside of a hospital setting such as dental check-ups, chiropractic treatment or a naturopathy consultation.

Some health insurance funds may exclude treatments such as reproductive services like IVF, psychiatric treatment or major heart surgery. Long-stay patients, some high-cost medications and non-medical cosmetic surgery also may not be provided cover until private hospital insurance.

It pays to keep in mind a budget hospital cover will have more limitations than a more expensive policy. However, you can always upgrade to a more comprehensive form of cover in the future as your circumstances change.

For example, a basic hospital cover may have suited you when you were a carefree, single young adult. But now you’ve coupled up or are considering starting a family, so a higher-level family hospital cover plan may match your health needs better.

As there may be waiting periods for some treatments, we recommend you review your cover annually to ensure you’re protected when it matters most.

Don’t forget to take into consideration waiting periods

You’ve probably heard a bit about waiting periods with private health insurance. It’s actually the most common question we get asked at Members Own.

For example, many people planning to start a family will want to take advantage of pregnancy services under their new private health insurance policy...but they’ll need to consider waiting periods.

Unfortunately, there’s no hospital cover with no waiting period.

If you’ve started a new hospital cover policy or have recently upgraded your level of cover, a waiting period will need to be served before you can utilise any of the benefits under that policy. This is to prevent people from signing up to a policy, making a big claim and then cancelling their membership once they’ve had the surgery or medical treatment.

Maximum limits on private health cover waiting periods are set by the Australian Government. To help guide you, below are some of the waiting periods outlined by the private health funds:

  • Pre-existing conditions – 12 months
  • Obstetrics services – 12 months
  • Specific conditions such as rehabilitation and palliative care – 2 months
  • All other hospital treatments and services – 2 months

Comparing the cover of Medicare and hospital insurance

Australia has one of the best health care systems in the world, so why would you need private health insurance?

Beyond the tax breaks, many people take out hospital only health cover as it provides them with a sense of security in case something unexpected arises. After all, the last thing you want to worry about it is how you’re going to finance hospital expenses when you’re ill or injured.

The reality is, major medical procedures can be expensive. A hip replacement may set you back $24,000, a caesarean delivery $9,000 or coronary bypass surgery more than $47,000.

The question you really need to ask yourself is whether you can afford to live without some form of private health insurance.

If you’re deciding whether to get covered, a good way to see if you’ll benefit is by comparing what’s covered by Medicare versus hospital insurance.

Compare health insurance now and get a quote

Who needs cover?

Doctor and Hospital
Choose your own doctor
A doctor will be appointed to you
Treated as a private patient in either a public or private hospital
Treated as a public patient in a public hospital
Greater choice when admitted in hospital
You may not be able to choose a hospital for treatment
You may not have to wait for treatment
Treatment is free
Medicare covers up to 75% of the medical costs under the Medicare Benefits Schedule
Waiting lists apply
Hospital and medical expenses

The remaining 25% or more of the medical costs of the MBS fee will be charged to you. Some or all of this will be covered by your insurer.

Other costs incurred may including hospital accommodation, theatre fees, pharmaceuticals and diagnostic tests.

There is no charge for public patients

Medicare will not cover the following treatments:

Private hospital costs, medical or hospital costs incurred overseas and medical treatment deemed not clinically necessary including cosmetic surgery.

What’s the difference between hospital and extras cover?

Unlike hospital insurance, extras cover (also referred to as ancillary cover or general treatment cover) will provide you cover for some or all the costs associated with treatment by an ancillary health service outside a hospital.

As with hospital cover, the services included in the policy and how much you are covered for will depend on your level of insurance and the insurer. Some of the typical treatments covered under extras cover include:

  • Physiotherapy

  • Chiropractic treatment

  • Occupational therapy

  • Speech and eye therapy

  • Podiatry

  • Optical including glasses and contacts

  • Home nursing services

  • Dental treatment

  • Prostheses such as hearing aids

It’s important to keep in mind, most of the services covered under an extras policy will have limitations applied by the insurer. This may be a limit on the number of times you can claim on one particular service or a limit on how many times you can claim per year.

If you’re considering extras in addition to your hospital health cover, it’s important to identify what your health priorities and needs are. For some, they’re happy with basic extras as long as it includes dental or optical. Others want to take advantage of the alternative therapies like naturopathy or acupuncture.

Once you know what you need from health cover, it’s much easier to compare policies and find the one that suits you.

Will ambulance cover be included?

Some hospital cover policies will include ambulance cover. Others will include it as part of their extras cover. This will vary from fund to fund, so if ambulance cover is important to you, make sure you ask the insurer.

It’s worth remembering there are two forms of ambulance cover: comprehensive and emergency only. You can read more about the different types of ambulance insurance here.

What are the benefits of combined cover?

Combining your hospital and extras cover under one insurance policy is one way to cover all bases.

Under a combined policy, you’ll be insured for medical treatments you receive in and out of a hospital. Depending on your level of cover, this can protect you for almost any medical issue!

Bundling your hospital and extras cover into one policy may also offer savings as you could be paying less than the normal cost of the individual policies. You’ll also be eligible for the health insurance rebate. Depending on your age and income, you could receive a 40% rebate on the cost of your insurance policy!

Australian government incentives for getting hospital cover

To encourage more Australians to take out private health cover and reduce the pressure on the public healthcare system, incentives were put in place by our federal government. These include:

  • The Medicare Levy Surcharge (MLS)

    Taxpayers who earn a great income than certain thresholds (over 90,0001 for singles and $180,001 for couples/families) will pay an additional tax of up to 1.5% if they do not have private hospital cover. This is in addition to the standard 2% Medicare Levy.

  • Lifetime Health Cover Loading (LHC)

    While private health cover isn’t compulsory, if you’re over the age of 30 and haven’t organised cover by July 1st following your 31st birthday, you’ll be charged a Lifetime Health Cover (LHC) loading fee. LHC loading starts at 2% of the premium and increases by 2% every year you’re without private hospital insurance after turning 31.

    To avoid paying the MLS and LHC loading fees, you’ll need to have a private hospital cover policy. Simply taking out extras cover or ambulance cover won’t cut it.

What to look for when comparing hospital cover

We know comparing hospital cover policies between funds can be time consuming and complex. Not only are you looking at the bottom line, you want to make sure the policy matches up to your health care needs.

Our online comparison tool is a handy way to compare policies or you can give our experienced Members Own team a call on 13 10 66 and they’ll do it for you!

While you’re comparing, here are some key things to keep in mind:

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Is there an excess or co-payment?

Some policies will have an excess or co-payment applied to reduce the premium rate. The excess is what you’ll need to pay if you’re admitted to hospital for treatment. The co-payment is charged based on the days you spend in hospital.

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Which hospitals can you receive treatment?

Depending on your policy, the number of private hospitals you can receive treatment at may be limited. Typically, not all private hospitals will be covered by your insurer. This is particularly relevant for those living in regional or rural areas where private hospitals are few and far between.

australia map

Does your policy cover ambulance?

Don’t assume your policy will over ambulance treatment and transport. Some funds will include ambulance in their extra packages while some may only include emergency only cover.

ambulance image

What’s your health fund GAP?

Medicare will cover 75% of your hospital admission and the remaining will be covered by your private health insurer. However, a GAP will be applied if your doctor or specialist charges a fee above the Medicare Benefit Scheme. In this case, you’ll be charged the gap.

Compare & Join

Decided private hospital insurance is for you? All you need to do now is compare policies to find the right cover to match your health needs and budget.

If you’d like to ask any other questions not covered above, give the friendly team at Members Own a call on 13 10 66.

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