Tthe Private Health Insurance Ombudsman (PHIO) recommends that people review their policies at least once a year. This is good advice considering that one’s circumstances and thus health needs change as one grows older.
One of the things to check is whether your policy’s coverage is still relevant. What could be an acceptable exclusion in your hospital cover at a younger age may become a critical gap later on in life.
Difference between Exclusion and Restriction
It is important to understand the distinction that private health funds make between exclusions and restrictions. An exclusion is a type of medical treatment or condition that is completely outside your coverage and no benefits will be received at all no matter if you get treated in a private or public hospital.
A restriction on the other hand is a conditional limitation. The restriction can be a lower benefit, a stipulation that states you can only be treated at a public hospital, or an extended waiting period before the benefit applies. This last restriction is also known as a Benefit Limitation Period (BLP), and they can go for as long as 36 months for certain types of medical procedures. BLPs usually start at the end of the standard waiting period that comes with most health insurance policies.
Common Exclusions or Restrictions
According to the PHIO, these are some of the treatments that are more commonly excluded and/or restricted in most private health insurance policies:
- Eye surgery
- Cosmetic and reconstructive surgery
- Cardiac-related procedures
- Obstetrics and maternity
- Psychiatric services
- Major joint replacements and surgery
- Treatments for infertility
Take note that this is by no means a comprehensive list and that policies from different private health funds will vary greatly. Some may classify these procedures as full-blown exclusions, others will only put restrictions on cover.
Among other factors, a policy’s terms may generally depend on how the health insurance provider intends to diversify and market their products. For example, packages targeted for young people will typically exclude treatments such as renal dialysis or cardiac surgery. The reasoning here is that the diseases requiring such treatments are less likely to occur to younger customers.
Implications for Health Insurance Customers
Like excess and co-payment mechanisms, exclusions and restrictions may lower your premiums. You may pay less because you get limited coverage. You have to understand, however, that this is a riskier way to decrease health insurance expenses. Even the most health conscious individual cannot reliably predict what kind of in-hospital treatment they may need in the future.
The list given above uses very broad terms. Individual health insurance policies will usually be more detailed and delineate which specific types of procedures are excluded or subject to conditional limitations. The point, then, is to use the actual provisions set in a policy as a basis for your health insurance comparison, and not just rely on what’s stated on a provider’s marketing brochure or website.
In their report, the Consumer Health Forum recommends that when scouring through a Standard Information Statement’s fine print, one should watch out for phrases like “Any services not shown as an Inclusion or Exclusion are limited to Public Hospital Benefits.” Such clauses mean that anything not in the detailed list would be taken as a restriction.
Exclusions and restrictions are always part and parcel of any insurance policy, from car insurance to business insurance. The crucial periods when you should particularly take note of them are when you transfer to a different insurer, acquire a new policy, or when you upgrade or downgrade the level of cover in an existing private health insurance policy.