Purchasing a health insurance policy may seem quite a daunting experience when you consider the phrases bandied about. This alphabetically-arranged glossary aims to explain some of the more commonly used terms.
Acute Care Certificate – This applies to long-term patients and is granted by the treating doctor. Health funds are relieved of the obligation to pay for treatment if the certificate is absent.
Admission – A person must be admitted by a doctor to be treated as a private patient in a registered private, public or day hospital. Emergency treatment at a private hospital is not an admission.
Agreement/Participating Hospital – A hospital that has a partner agreement with a health fund to ensure complete health cover for particular accommodation and operating theatre fees, ensuring out of pocket costs are kept to a minimum for members. Each health fund has a different list of participating hospitals, and admission to non-participating hospitals may mean a patient has to pay out-of-pocket costs.
Alternative Therapies – Includes treatment via Alexander technique, acupuncture, aromatherapy, Bowen technique, Chinese medicine, hydrotherapy, homeopathy, hypnotherapy, massage, kinesiology, myotherapy, reflexology, naturopathy, shiatsu, remedial massage and western herbalism.
Ancillary/Extras Cover – Includes dental, chiropractic, physiotherapy, optical, pharmacy and alternative therapies (described above) that Medicare doesn’t cover.
Annual Limit – The maximum benefit a person can receive for a specific treatment in a year and applies after the waiting period has been served.
Benefits – Covers claims for treatment received at hospitals and is the minimum amount, as defined by the government, that health funds must cover.
Benefit Limitation Periods – Allows a health fund member to enjoy lower insurance premiums by restricting the benefits a member can claim for treatment of specific conditions, e.g. being eligible for full knee replacement surgery benefits only after 3 years’ cover, despite the treatment’s standard 12-month waiting period.
Calendar and Membership Years – A membership year begins on the day a member joins the fund, whereas a calendar year spans January 1 to December 31. Some funds may use the terms interchangeably, so it’s advisable to clarify this in the beginning.
Change of Cover – Refers to up- or downgrading of a health policy. Members should check if this action will affect any waiting periods to be served prior to becoming eligible for benefit claims.
Community Rating – Ensures that all individuals are entitled to purchase the same health insurance policy at the same price, with the guaranteed right to renew said policy. A health fund cannot refuse to insure any individual on health grounds.
Compensation and Damages from Others – Refers to compensation and/or damages that can be claimed from compulsory third party insurance, worker’s compensation, common law, travel insurance, sports insurance, crimes compensation and litigation.
Co-Payment – The amount a member agrees to pay for the cost of hospital admission.
Dependants – Defined as children and students (full-time) under 25 years living at home with no dependents of their own.
Excess – The amount a member agrees to pay for each hospital admission before benefits are paid out. Members tend to opt for higher excess to maintain lower premiums.
Exclusions – Hospital procedures (public or private) for which a member will not receive payment.
Gap/Out-of-Pocket Expenses – The difference that exists between the fees charged by doctors and the Medicare Benefits Schedule (MBS) fee.
General Treatment Cover – Covers non-hospital medical services excluded by Medicare, e.g. optical, dental, physiotherapy, other therapy and ambulance.
Medicare Levy Surcharge – A surcharge imposed by the government for those who don’t have hospital cover. Obtaining even basic hospital cover is usually cheaper than paying an additional 1% on taxable income.
Restricted Benefits – Refers to a policy that provides fewer/limited benefits and the minimum payout for specific treatments in “exchange” for lower premiums. Often, members have to pay for theatre fees, same day theatre or intensive and coronary care units.
Waiting Period – The duration a member has to wait after joining a health fund to become eligible for benefits. Waiting periods may vary with each health fund.
Rebate – Health fund members are entitled to this rebate, which can be claimed a discount on premiums paid or claimed as a rebate on an annual tax return. It is based on income and there are differing rebate levels depending on age and income.
This list is just a small section of the terms used in private health insurance today. As each health fund may possess its own terms, it’s always best to ask for clarification before committing to a health insurance policy.