Compare The Best Private Health Insurance Policies For Mental Health

One in five Australians deals with a mental health condition requiring ongoing support. Private health insurance covers psychology and counselling, including various specific mental health conditions such as depression, anxiety and other mood disorders.

Most conditions can be treated or managed, especially with early intervention.

Yet the number of people seeking support for their mental and emotional wellbeing is significantly less than those accessing treatment for physical illnesses.

Choosing the right insurance can help you access expert services, such as counselling or rehabilitation, without the added pressure of finding the money for treatment.

This guide will walk you through everything you need to know.

A quick note: If you've arrived on this page and need immediate help, we'd suggest speaking to the team at Beyond Blue.

What is mental illness?

The Department of Health defines mental illness (which is also known as a mental health disorder) as "a health problem that significantly affects how a person feels, thinks, behaves, and interacts with other people".

The major categories of mental illness include:

• Depression

• Anxiety

• Schizophrenia

• Bipolar mood disorders

• Personality disorders

• Eating disorders

Mental health conditions also affect how a person thinks, feels and behaves, and are generally considered, medically, to be temporary and less severe than mental illness -- although that may not be the case for somebody coping with a condition.

Mental health conditions are often the result of a stressful period in life, such as postnatal depression or post traumatic stress disorder.

What treatments are available for people experiencing mental illness?

Mental health treatments can vary depending on their symptoms and severity, however most treatments can include medication, regular counselling sessions and inpatient treatment in a hospital or specialist recovery centre.

Mental health treatment can require more than one approach. A mix of treatments and specialists may be engaged to treat various aspects of mental illness. These include:

General Practitioners:

GPs are often your first stop along the journey to mental health recovery. Your GP coordinates the treatment of mild mental issues by prescribing medication and/or referring you to a psychologist for therapy. A GP isn’t qualified to diagnose the more severe mental health conditions. They’ll refer you to a psychiatrist for further diagnosis if your condition is beyond their scope. 

Psychologists:

A psychologist is your go-to for therapy or counselling. Psychologists can help with most mental health concerns. You can see them without a referral. Note that psychologists cannot prescribe medications.

Psychiatrists:

Medically-trained specialists who diagnose and treat mental disorders, and are able to prescribe medications, psychiatrists take on the more severe mental health cases.  They’re able to prescribe specialised medication and lay out a treatment plan that may also include therapy. In 2006, the Australian government launched the Better Access initiative, which gives people improved access to mental health treatments under Medicare.

Under this initiative, anyone with a mental health issue is covered for up to 10 sessions with a qualified psychologist and psychiatrist. All that's required is that you see your GP first to get a Mental Health Care Plan (MHCP).

If you require hospitalisation, Medicare covers you for treatment in a public hospital.

How does private health insurance cover mental health care?

Private health insurance is split into hospital cover and extras.

Hospital cover will look after some or all of your out-of-pocket costs for things like private patient inpatient care at a public or private hospital, or treatment facility.

How does health insurance work with mental health conditions?

If you want unrestricted access to hospital psychiatric services you'll probably need to take out a top tier Gold hospital policy as most insurers have this service in their most expensive package.

As ever, it's worth comparing to make sure you're getting the best deal. You'll be able to get rebates back from your health fund on your extras.

Remember, both extras and hospital cover will come with waiting periods, so you may not be able to claim back on treatment straight away.

Private health insurance can supplement any rebates you’re entitled to get from Medicare. It can cover you in two ways:

Inpatient psychiatric care

Currently, many insurers cover this under their mid- to top-tier hospital policies. All Gold tier policies currently include cover for inpatient mental health care. If you already have health insurance, you can upgrade to a Gold tier policy once without having to serve any new waiting periods for in-hospital psychiatric care. Treatments include: 

• therapy

• psychological evaluation

• addiction treatment and a host of in-patient mental health services

Outpatient mental health cover

Most extras policies cover you for counselling and/or therapy sessions with a psychologist, without a referral. This can work alongside Medicare's outpatient services because your extras health insurance benefit won’t cover psychiatry. If you utilise both Medicare and your extras cover, you can access the care you need from a broader range of professionals.

Not all of the treatments will be covered by private health insurance and some funds have restrictions on what you can or can't access depending on your level of hospital cover, so it's always worth comparing and checking exactly what's covered.

Does Medicare cover mental health treatments?

Medicare covers some or all of the cost of treatment for many mental health conditions via public hospitals, recovery centres, specialist services, psychiatrists and even pharmaceutical subsidies.

Your local doctor can discuss your treatment options and put together a mental health care plan, which currently covers up to ten sessions with a mental health expert each year. Under federal government proposals this will soon rise to twenty sessions.

Do I have to serve any waiting periods to access mental health cover?

Mental health treatments tend to come with two month waiting periods. This is the time you'll have to wait before you can access the treatment. They're among some of the shortest waiting periods in private health.

If you need urgent treatment, there's also the mental health waiver. This is a government requirement introduced in 2018 that required all insurers to implement a waiver for mental health services provided as hospital or hospital substitute treatments. This includes drug and alcohol treatment. You can use the mental health waiver once per person in your lifetime.

To access it, you'll need:

• To hold private health insurance

• Already served a two month waiting period on any partially covered (otherwise known as restricted) hospital-based psychiatric services.

• Have hospital cover that includes hospital-based psychiatric services

This waiver includes pre-existing conditions, so it is possible to upgrade your coverage while you're seeking help, without serving the two month waiting period and benefit from increased financial assistance.

How much will health insurance for mental health cost me?

This will vary from fund to fund and depend on whether you take out hospital cover, extras cover or a combined policy.

Remember, you're not just taking out mental health extras and many insurers will have packages that include other everyday expenses like dental and optical.

Also remember that the cheapest cover may not necessarily give you value for money.

There's three important questions to consider when you're comparing taking out or switching private health insurance.

Frequently Asked Questions

1. How much will you get back in terms of rebates on your extras?

Different policies will offer you different amounts back on mental health treatment.

These can vary so if you think you'll be visiting a therapist regularly, it's worth finding a policy that gives you a significant amount back.

Some funds give you a percentage of the session back.

For example, if your therapist costs $200 per session and you get 60% back, you'll have an $80 out-of-pocket expense.

Others may give you a set benefit, no matter the cost of the session.

For example, if your fund gives you a set benefit of $70 per session, you'll have a $130 out-of-pocket expense for that same therapist.

As you can see, it pays to compare the smaller details on extras.

This is where the specialists at Compare Club can help you dig deeper and find the extras that give you real value for money.

How do extras rebates work for mental health services?

Health funds either let you claim:

How this works?

2. Your extras limits.

This is the amount you can claim on your extras, such as counselling, over the course of a calendar year.

Anything above the limit comes out of your pocket.

If you're hitting your limit quickly, you may want to review your cover and see if there's better policy that costs a similar amount.

3. Gap fees

Doctors and specialists who treat you while you're in a hospital can choose whether to participate in your insurers' no gap and known gap arrangements (if you're not sure what gap fees are, we'd recommend reading our guide.

But, in short, they can land you with some seriously large bills even if your cover isn't quite right).

Always check which type of agreement your doctor or specialist has with your insurer before treatment.

Are mental health retreats covered under health insurance?

Some parts of a treatment program could be covered by your insurer.

For example, this could include subsidies for eligible psychology, massage or wellness therapies.

However, most mental health and wellbeing retreats are likely to involve out-of-pocket expenses.

Is postnatal depression covered under my mental health policy?

Postnatal depression is classified as a mental health condition and is covered under many policies.

Although treatment can vary, most providers will assist patients with a range of support options.

We cover this in more detail in our pregnancy and private health insurance guide.

Can I access a private health insurance rebate for psychology services like counselling?

Since 2018, the Australian government has been upgrading the level of mental health care available to private health insurance policyholders. The idea is to make it easy for you to access in-hospital mental health treatment if you need it. This includes in-hospital treatment and therapies for anxiety, depression, drug/alcohol addiction and other mental health issues.

All Gold tier hospital cover includes full, unrestricted cover for in-patient psychological care, and the following supports for mental health care:

1. Easy upgrades: You can upgrade to a policy with in-hospital psychiatric cover any time you need, without having to serve additional waiting periods for your treatment. You can even do this up to 5 days after being admitted to hospital, and you'll still be covered.

2. No treatment limits: Your insurer can't place limits on the number of times you receive a particular in-hospital treatment in a year. You'll be covered for as many of these sessions as you need. This generally applies to:

• day programs;

• electroconvulsive therapy; 

• transcranial magnetic stimulation. 

What if I need a higher level of mental health care than I’m covered for?

If you’ve got limited psychiatric cover in your hospital policy - and have already served your two month waiting period - it’s possible to upgrade to a higher level of cover without having to serve a new waiting period. This may get you access to psychiatric care in a private hospital.

How do I compare health insurance for psychologists?

Check your current extras policy for your benefits and annual limits for psychology. It’s also worth reviewing your hospital policy to find out if you’re adequately covered for in-patient psychiatric services. Our experts can help you find a better value policy that meets your needs with ease#. Click below to speak to them today.

This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

References: Black Dog Institute, Facts and Figures about Mental Health [PDF]

AIHW, Mental health services in Australia

Federal Government Department of Health, Budget 2020-21: Prioritising Mental Health [PDF].