Private Health Insurance Comparison: Know Your Hospital Cover
If you’re aware of the Lifetime Health Cover (LHC) initiative, you’ll know that the Australian government is keen for Australians to take out private hospital cover early on in life to take some of the strain off Medicare, but you may not be so aware of how it will benefit you and why you should take the time to compare health insurance for private hospital cover.
Why get private hospital cover?
With Medicare covering treatment as a public patient in a public hospital, you may be wondering why you should arrange hospital cover beyond this. Through Medicare, you’ll be treated by doctors and specialists chosen by the hospital, so if you want to have greater control over who treats you, you may prefer to be treated as a private patient instead. Medicare doesn’t pick up the full tab for this – only 75% of the Medicare schedule will be covered – so you can expect to incur out-of-pocket expenses if you don’t have private hospital cover. You can also choose to have your own room rather than sharing with others.
It’s worth bearing in mind that you don’t have complete control even with private hospital cover. If you want to be treated at a particular hospital but with a doctor who isn’t authorised by your insurer to provide the treatment, you won’t be covered.
What is private hospital cover?
Private hospital cover refers to procedures that are carried out while you’re an in-patient who has been admitted to hospital. There are two aspects: hospital costs and medical costs.
Hospital costs refers to fees for hospital accommodation, theatre fees, labour ward fees, pharmaceuticals that are covered by the Pharmaceutical Benefits Scheme, and the majority of diagnostic tests. This cover may vary depending on your health fund, so this is another good reason to compare private hospital cover before you commit yourself.
Medical costs include fees charged by your doctor, surgeon, anaesthetist or specialist doctor for hospital treatment. Your health fund will cover you for 75% of the MBS fee and if there is a gap beyond this, you may have to pay part of the costs yourself or your health insurance may include some gap cover.
What does private hospital insurance cover?
A lot depends on your level of coverage, so be sure to compare the type and level of hospital cover offered by different private health funds during your health insurance comparison. If you’re only choosing a basic level of private hospital cover, it generally won’t include things like cardiac cover, obstetrics or joint replacement surgery. These types of treatment will typically be restricted or completely excluded, depending on how broad your coverage is.
The differing levels of coverage offered by health funds means that there is scope to choose a policy which restricts or excludes options that you don’t think that you’ll need at your current stage of life. For example, if you’re young and healthy, you may choose a basic level of coverage that doesn’t include joint replacement or cataracts. The more comprehensive private hospital policies don’t have restrictions or exclusions attached to them, which can be useful if you think you may need a fuller range of options.
What isn’t covered by private hospital cover?
There are a few things that it’s wise to check before you take out private hospital cover. Depending on your policy, you may have restrictions and/or exclusions for which you’re not covered. It’s vital that you spend some time reading the private hospital cover policies in full, so that you’re not choosing a policy which restricts or excludes things that you may need.
As some health funds only have agreements with certain hospitals, check to see whether this is the case for your health fund, as it may leave you restricted in terms of where you can be treated. Take health insurance waiting periods into account too, as you may not be covered if you’ve not served out a waiting period before you need to access the benefits.
What if I need surgery after an accident?
Private hospital cover usually will cover you for elective surgery. For example, if you have been told that you need a specific type of surgery which is covered by your health fund, this will be covered by your private health insurance as long as you’ve served out the relevant waiting period.
If you’re involved in an accident and need to have treatment as a result, you won’t usually have to have served the waiting period before you can be treated. Treatment may be covered in an emergency that you’re not otherwise covered for. For example, if you need to have joint reconstruction but aren’t covered for this on your private health insurance, this may be waived for emergency surgery. The big exception to this comes if you’re involved in a road accident, as this should be covered by the compulsory third party car insurance of the driver at fault.
What if I need emergency first aid treatment?
In this scenario, you may not be formally admitted to hospital, so private hospital cover may not cover you. If you choose to go to the emergency department of a public hospital, you’ll be covered by Medicare. If you’d rather go to the emergency department of a private hospital, Medicare will cover treatment by a GP, but only 85% of the Medicare Benefits Schedule for treatment by a specialist doctor. Tests such as emergency x-rays or blood tests may also lead to out-of-pocket costs.
Private hospital cover will cover you as a private patient and give you greater choice over where you’re treated and by whom. Coverage levels vary between private health funds, so it’s important to compare health insurance to make sure that you’re choosing a private hospital cover that suits your needs.
As you get older, you may feel that you’ll benefit more from a higher level of coverage that includes things like physical rehabilitation and cataracts cover, which may not seem so crucial when you’re younger. By doing a health insurance comparison to assess your options for private hospital cover, you can choose a level of private hospital cover which best suits your needs.
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