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Check your health cover

As we age and change so do the things that matter most to us. Understandably our healthcare becomes increasingly important. With accessibility and affordability of healthcare becoming crucial issues for many ageing Australians, it is worth considering your private health insurance cover, writes Dr Rachel David.


More than 13 million Australians rely on private health cover for security and peace of mind and most importantly to ensure they receive the best available health care where and when they need it.

There are currently 4.3 million Australians over the age of 50 with private health insurance. This represents around 55 per cent of the over 50s population in Australia and 35 per cent of the total insured population.

In addition to paying for access to private hospitals and choice of doctor, private health insurance also provides value by enabling fund members needing non-emergency surgery to bypass public hospital waiting lists and receive their treatment when it’s needed.

The benefits of having health cover are well known. Latest statistics show that the average cost of a hospital claim for the over 50s cohort exceeded $10,000. This varies from individual to individual, depending on chronic condition complications and the length of a person’s stay in hospital. Did you know it could cost you around $20,500 (5 day hospital stay) to have a common non emergency procedure such as a knee replacement, if you don’t want to join a public hospital queue, and around $27,000 for a hip replacement (6 day hospital stay)? Of course, with health cover you won’t have to pay these costs.

Private health insurance in Australia operates under a ‘community rating’ system. This means health funds cannot deny membership or charge a higher premium upfront based on your health status. It does however mean, under the lifetime health cover provisions, you will be charged a higher premium if you join for the rst time over the age of 30. This is to prevent people joining at a time of life when they know they are likely to get sick, and paying the same price as a younger, healthier person who does not claim.


Here are some interesting facts about private health insurance that reinforce industry evidence that it plays a role in relieving pressure on our public hospital system, benefitting all Australians.

In 2014-15, private health insurance paid for over 2.21 million non-emergency procedures involving surgery in hospitals, an increase of two per cent from the previous year.

With approximately two-thirds of non- emergency surgeries being performed in the private healthcare sector, the sector is a critical pillar of Australia’s health system. Average waiting times for non-emergency procedures in the public hospital sector have doubled since the year 2000.

Most people (84 per cent) with private health insurance believe it is value for money.

Health funds pay out on average 86c in every dollar raised through premium income in claims, with many funds paying more than this.

Nearly half of all Australians with private health insurance have an annual income of less than $50,000, showing it’s not just for the wealthy. It follows that many health fund members are worried about hanging on to their insurance in the long- term because of rising health costs and subsequently higher premiums.

The costs of healthcare in Australia are increasing across the board as a result of our ageing population, growth in chronic disease, advances in medical technology and higher charges by healthcare providers. Premium affordability is a major issue for health fund members and in an environment where health funds have no in uence over what a medical practitioner charges, no control over increasing health costs resulting from hospital charges or medical devices, choosing the right policy is essential.

As we get older it’s more important than ever to make sure health insurance covers you for the right services. Cover for heart surgery, joint surgery, in hospital rehabilitation and cataracts might seem more relevant as we age.


There are two types of private health insurance – hospital policies that help cover the cost of in-hospital treatment by your doctor and hospital costs such as accommodation and theatre fees, and general treatment cover, often called ‘extras’, which is used for allied health care services in the community, such as dental, optical treatment and physiotherapy. You can buy separate hospital and general treatment policies or combined policies. Many health funds offer combined policies that provide cover for both hospital and general treatment services. Some funds have pre-packaged policies, while others allow you to mix and match hospital and general treatment options.

Once you have health cover, it is worthwhile reviewing your policy from time to time. Contact your health fund to discuss updating or changing your policy as your healthcare needs change. Health funds offer a large range of products which cater speci cally for chronic disease management and are designed to keep members healthy and out of hospital. It is in the best interest of all funds to encourage their members to lead healthier lifestyles.

If you’re purchasing private health cover for the rst time or upgrading your policy Life BEGINS at 50 you will have a waiting period to serve before claiming bene ts. It’s important to check carefully what is and isn’t covered under your policy. Depending on your level of cover you may have to pay an out of pocket expense known as a ‘gap’.

As a consequence of the regulatory environment in Australia, health funds have no control over the fees charged by medical providers. Remember, it is the responsibility of the treating medical practitioner to provide consumers with informed nancial consent if they choose to charge above the Medicare Bene ts Schedule (MBS) fee, regardless of the type of service.

Informed nancial consent (IFC) occurs when private patients receive relevant cost information about their treatment prior to the treatment taking place. It enables patients to make informed decisions about their healthcare and any costs they will be liable to pay. IFC should occur well in advance of any planned treatment, so you have the opportunity to choose an alternative course of action if necessary. You should never hesitate to ask your medical specialist about out-of-pocket costs, not just for their services but for any tests you might have, or other services such as anaesthesia provided as part of your care.

If you have any doubts about medical specialist out-of-pocket costs, or you are concerned about your ability to afford gap payments, you should let your general practitioner know at the time he or she refers you to a specialist.


Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested and the rebate you receive will depend on your income level and your age. A higher rebate kicks in for those aged 65-69 and the rebate increases again at 70 years.

For details of how much you will receive from the private health insurance rebate visit the Government’s website au, which is the government’s one-stop-shop for private health insurance information.


Check-your-cover---Dr-Rachel-DavidDr Rachel David
Dr Rachel David is the Chief Executive of Private Healthcare Australia (PHA). PHA is the Australian private health insurance industry’s peak representative body and represents 18 health funds throughout Australia, collectively covering approximately 96 per cent of the private health insurance sector. PHA is committed to an industry-led solution to make it easier for Australians to choose their health insurance, through using common medical terms, and clear information to enable our members to better navigate the private health system.



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Alana Lowes

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