Hospital Cover
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The last thing you want to worry about if you need to go to hospital is whether you can afford the hospital treatment. By taking out private health insurance which includes hospital cover, the main expenses involved in your hospital care could be included under your policy, leaving you to concentrate on getting back on your feet.
Savvy can help you compare a variety of hospital cover policies from our partner’s panel of industry-leading insurers. You can consider a range of competitive online quotes side-by-side, comparing the different costs, features and inclusions. Compare with confidence through us and buy your hospital cover policy either online or over the phone today!
What is hospital cover and what levels are available?
Hospital cover is a form of private health insurance which may assist you with the costs of hospital treatment you may require. It can cover many of the costs associated with receiving hospital treatment as a private patient, either in a public or private hospital. In addition, it opens the door to further treatment options, depending on the policy and the level of cover you choose, such as potentially choosing your doctor and private hospital… and avoiding public hospital waiting lists.
If you do need to receive treatment in a private hospital, Australia’s Medicare system will cover 75% of the Medicare Benefits Schedule fee for medical services while you’re a hospital patient, while private health hospital insurance may cover some or all of the remaining cost. The private health insurance industry in Australia is heavily regulated by the Australian Government, so there are strict rules which apply to how different health insurance policies are described and sold. These rules make it easier for the public to understand exactly what coverage they are buying and to compare similar policies when considering a switch.
There are four different levels of hospital cover available in Australia. These are:
- Basic cover: this will be the cheapest level of cover to buy and typically offers cover for very few treatment categories such as public hospital cover for psychiatric services, rehabilitation and palliative care, and sometimes ambulance cover. If you do buy such a policy, you may find that you still have substantial out-of-pocket expenses to cover on top of the cost of your health insurance premiums.
- Bronze cover: this is the next level of cover up from a basic policy, and will cover up to 18 further clinical categories.
- Silver cover: this level can offer cover for as many as 29 further clinical categories, making it a more comprehensive coverage option than basic or bronze cover.
- Gold cover: this is the top (and most expensive) level of cover available, which can provide coverage for all Medicare recognised clinical categories and can offer the highest level of protection against treatment costs.
Each health insurer may have a different way of describing the tiers of cover they provide, with different names used to describe the policies they offer. However, all hospital policies must fall within one of the four basic levels described above and must provide as a minimum the regulated cover for the number of clinical categories for that type of policy.
For example, an insurer offering a silver level of cover must provide insurance for the 29 regulated categories further to basic cover. If they offer more than the standard 29, they may describe their policy as ‘silver plus’. In addition, the same principle applies to all health insurance funds: the more options covered, the higher the cost of the insurance will probably be.
What does hospital cover include and exclude?
Hospital insurance can provide cover for the following:
- Consultations with doctors, anaesthetists and other specialists while a hospital inpatient
- The costs associated with surgery
- Tests administered as part of your treatment whilst an in-patient (such as blood tests, CT scans and x-rays)
- Allied health services such as pain management or psychology (while an inpatient)
- Costs associated with a private hospital stay, such as theatre fees and
a private room (subject to availability, eligibility and your policy’s terms and conditions) - Ambulance cover*
*Not included under all hospital insurance policies. Ambulance cover differs between states and territories, with some affording residents free cover either within their state or nationally.
What isn’t included in hospital cover?
There are several areas which are not covered by hospital private health insurance. However, some of these areas may be included in extras-only cover, which is another type of health insurance able to be purchased either separately from hospital cover, or as a package of both hospital and extras cover. It can sometimes be cheaper to purchase this form of combined hospital and extras policy rather than buy the two types of insurance separately.
What won’t be covered in your hospital cover includes:
- GP visits (part of the cost is covered by Medicare, less any gap that is charged)
- Cost of visiting a public hospital emergency department and a hospital stay as a public patient (which is also covered by Medicare)
- Most x-rays, MRIs, CT scans and blood tests which are performed on outpatients
- Procedures not considered medically necessary (such as breast augmentation or liposuction purely for cosmetic purposes)
How much does hospital cover cost?
The cost of your health insurance will depend on several factors, such as:
- The level of cover you choose
- Excess and co-payment choices
- Your age (as you may be entitled to an age-related reduction)
- The government private health rebate you’re entitled to
Although age does play a part in the cost of your hospital cover insurance, this is due to the rebates or reductions you may receive as a consequence of your age. Unlike other forms of insurance, such as travel insurance, health insurance is ‘community-rated’, which means it is illegal to discriminate against a person based on their age, gender or pre-existing medical conditions. It is also not legal to decline to sell a person a health insurance policy due to any pre-existing health conditions.
How the cost of hospital cover is affected by the age of the applicant
This is an example* of how health insurance policies cost the same for everyone under ‘community-rated’ rules but may end up costing more or less in premiums depending on the age of the applicant:
Example 1:
Male aged 27, earning $95,000 p.a., buying his first single health insurance policy. Chooses to purchase a singles Silver policy costing $180 per month.
This man has previously been covered by his parent’s health cover. However, that ended when he reached 25 years of age, so for the past two years, he has been uninsured.
- He may be eligible for an age-related discount of up to 6% (the allowable discount is 2% for each year that a person is aged under 30)
- However, he may have to pay the Medicare Levy Surcharge until the date he took out hospital cover. This is because he hadno private insurance for part of the financial year . This is calculated at 1% of his income, as he earned more than $90,000 but less than $105,000.
Example 2:
Male aged 67, retired, earning less than $90,000, who has had health insurance all his adult life since the age of 30. He chooses to purchase a singles Silver policy costing $180 per month.
In this second example, the retired man may be eligible for the following rebates:
- The private health insurance rebate for those aged 65 to 69 earning less than $90,000 per year is currently 28.71% (correct as of February 2023)
- No Medicare Levy Surcharge is payable as the man has had private health insurance for the entirety of the past financial year without breaks
*Note: These are examples for illustrative purposes only and may not reflect the true cost of hospital cover for the examples shown. They are not intended to offer advice but rather illustrate how rebates and reductions can affect the total cost of premiums paid.
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How should I compare hospital cover policies?
Make sure you’re comparing apples with apples
When comparing policies, ensure you are comparing policies which offer a similar level of cover, such as silver with silver or gold with gold. Because the level of cover you choose will affect the cost, it’s important to make sure you compare policies which offer very similar levels of cover.
Check the level of cover for pre-existing medical conditions
Naturally, you’ll want cover for your pre-diagnosed medical conditions if you currently suffer from one. Compare exclusions carefully to determine whether any medical conditions you’re currently experiencing are included in the policy you choose.
Compare the cost of the policy
Even if two policies offer cover for the same clinical categories, the cost of cover may vary considerably between insurers. Therefore, compare costs carefully, but not at the expense of the cover you require.
Consider claim limits
Policies will vary as to the claim limits they offer, plus eligibility terms and conditions. For example, some extras policies may limit the number of times per year a physiotherapy claim may be made. Most insurers offer a website or mobile app which enables customers to check claims that have been made that financial year, and how much cover may be remaining.
Think about waiting periods
Anyone taking out health insurance for the first time will have to observe waiting periods before they are eligible to claim on their policy. However, if you’re looking at switching your insurer and you choose a hospital policy on the same tier as your existing cover, you may not have to repeat your waiting periods already served. New waiting periods will only apply if you choose to increase the level of your cover or you haven’t already served a waiting period for a specified clinical condition.
The pros and cons of hospital cover
PROS
Avoid long public hospital waiting lists
Having appropriate private health insurance may offer you the opportunity to avoid long public hospital waiting lists and get the surgery or treatment you need sooner in a private hospital.
Choose your preferred hospital
Depending on availability and what private beds are available in your area, you may be offered a choice as to which hospital you’re admitted to in order to receive your treatment. Naturally, this will also depend on the private arrangements of the specialist you choose to treat you. Some surgeons only operate through one hospital, others offer treatment in several locations.
Choose your preferred doctor
Again, depending on availability, you may be able to choose the doctor you see as a private patient. Naturally, those who live in urban areas where there are numerous specialists to choose from may have more choice than those living in remote or rural areas where there may be fewer specialists operating.
Choose the time and date of your operation
As most of us have busy lives, having private health insurance may offer you more choice as to when your surgery is performed (assuming your surgery is elective and not necessary as an emergency procedure through an accident and emergency department). This may enable you to book your surgery at a time most convenient for your other work and family commitments.
Could receive a private health cover tax rebate
The Australian Government assists Aussies with the cost of their private health insurance, so you may be eligible for a rebate on your premiums. This can either be claimed at tax time when you submit your tax return or you can enjoy cheaper premium payments by arranging for your insurer to apply the rebate to your up-front premium costs (the government then pays your rebate entitlement directly to your fund).
CONS
Not always cheap
Naturally, buying private health insurance costs money, which can add financial pressure, however it does provide peace of mind and more options if health care is needed. It’s also worth considering the consequences of not having private health insurance versus the cost of paying for that safety net.
Exclusions
All insurance policies have exclusions and terms and conditions. Private health insurance may not cover 100% of your treatment costs due to benefit limits and/or exclusions. As such, you should familiarise yourself with the terms and conditions and exclusions which apply to the policy you are considering before you commit to buying it.
Gap may not be fully covered
If your medical practitioner charges above what Medicare can cover for your treatment (which is known as a gap), your hospital cover may not always cover the difference, meaning you could find yourself out of pocket for this expense.
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