Private Insurance Support: Boon Or Bane For Hospitals?

Private health insurance provides cover for healthcare costs not covered by standard government-provided medical insurance. Depending on the policy, it may allow you to be treated as a private patient in a hospital, giving you a choice of doctor and hospital, and potentially shorter waiting times. Private health insurance can also cover 'extras' such as dental, physiotherapy, optical, and other medical services. However, it is important to note that private health insurance does not cover all out-of-hospital medical services, and there may be exclusions and restrictions on certain treatments and conditions.

Private insurance covers hospital costs not covered by Medicare

Private health insurance provides cover for health care not covered by Medicare. It can help pay medical costs that Medicare doesn't cover and lets you have treatment in hospital as a private patient.

Private health insurance policies are divided into hospital cover, general treatment cover (also known as ancillary or extras cover) and ambulance cover. Hospital cover helps with the costs of treatment as a private patient in hospital. Extras cover helps with the cost of out-of-hospital health services that Medicare does not cover, such as physiotherapy, glasses, dental, optical, chiropractic treatment, occupational therapy, speech therapy, eye therapy, and prostheses (e.g. hearing aids). Ambulance cover can help with the cost of emergency transport and medical care.

The health insurance policy you buy will have some limitations on hospital treatment, which might include exclusions (specific services that are not covered at all) and restrictions (services that are covered to a limited extent). For example, Medicare does not cover elective cosmetic surgery, so private insurance policies may only cover this to a limited extent or not at all, depending on the policy.

Private health insurance can also cover a wide variety of clinically appropriate alternatives to hospital treatment, such as treatment provided in your own home or in community healthcare clinics, as well as programs to manage or prevent chronic disease.

Private insurance can help cover 'extras' like dental and optical

Private insurance can help cover the costs of extras like dental and optical. Extras cover is a type of private health insurance that helps pay for out-of-hospital health services not covered by Medicare. This includes things like dental check-ups, glasses, contact lenses, and eye therapy. It can also cover more expensive procedures like laser eye surgery.

The amount covered by extras insurance depends on the level of cover you choose. Basic or budget policies may only cover essential services like dental check-ups, glasses, and contact lenses, while more comprehensive policies can include benefits for things like orthodontic treatment, hearing aids, and eye surgery. The higher the level of cover, the more you can expect to pay in premiums.

When choosing an extras policy, it's important to consider the claim limits, waiting periods, and whether there are any exclusions or restrictions on the types of services covered. For example, some policies may only cover a percentage of the cost of glasses or contact lenses, while others may have annual or lifetime limits on certain types of treatment.

In addition to helping with the cost of extras, private insurance can also provide benefits for hospital treatment. Hospital cover helps pay for treatment as a private patient in a hospital, giving you the choice of doctor and hospital. Combined policies that include both hospital and extras cover are available, but it is also possible to purchase these types of policies separately.

Private insurance offers faster access to specialists

Private insurance provides individuals with the flexibility to choose their preferred doctors and hospitals, allowing them to tailor their healthcare journey according to their needs and preferences. They can select from a list of approved practitioners and, in some cases, even choose a consultant from a list of qualified doctors. This level of choice and customisation ensures that individuals receive personalised care that is tailored to their specific requirements.

In addition to faster access and greater choice, private insurance also covers a wide range of specialist services. This includes consultations, diagnostic tests, treatments, surgeries, and therapies provided by specialists in various fields. These services may be partially or fully covered by private insurance, depending on the specific policy and its exclusions.

The ability to access specialists quickly and choose one's own healthcare providers gives individuals a sense of control and peace of mind when it comes to their health and wellbeing. It empowers them to take charge of their healthcare journey and make informed decisions about their treatment options.

It is important to note that the availability and extent of coverage for specialist services may vary across different private insurance providers and policies. Therefore, individuals should carefully review the terms and conditions of their private insurance plans to understand what is covered and what may be excluded.

Private insurance can be used in public hospitals

Private health insurance can be used in public hospitals, but it is not mandatory. If you have private health insurance and are admitted to a public hospital, you may be asked if you want to use it. It is important to know that every Australian already has health cover through Medicare, which gives access to public hospitals. However, some people opt for private health insurance to be treated in private hospitals, which may offer shorter waiting times and more comfortable accommodations.

If you choose to use your private health insurance in a public hospital, you may be able to choose your medical specialist and have access to private rooms, depending on availability and medical need. Additionally, your health insurer's payout for your admission may benefit the public hospital. On the other hand, you may be left with out-of-pocket costs, such as anaesthetist fees, that you wouldn't incur as a public patient. You might also have to pay your insurance excess.

Before making a decision, it is recommended to ask the hospital what it will mean to be admitted as a private patient. Ask questions such as whether there will be any out-of-pocket costs, if you can choose your doctor, and if a private room can be guaranteed. This will help you make an informed choice based on your personal circumstances.

It is worth noting that public hospitals encourage patients to use their private health insurance as it brings in additional funding from private insurers on top of government subsidies through Medicare. However, private insurers argue that this contributes to rising premiums for private health cover. Ultimately, the decision to use private health insurance in a public hospital depends on your specific needs and preferences, as well as your insurance policy's coverage.

Private insurance may not cover pre-existing conditions

Private insurance provides cover for health care not covered by Medicare, such as physiotherapy, glasses, dental, optical, and more. Depending on the policy, private insurance can let you be treated as a private patient in a hospital.

However, private insurance may not cover pre-existing conditions. Before the Affordable Care Act, insurance companies could deny coverage or charge higher premiums to individuals with pre-existing conditions. This was because insurance companies had to pay large sums for the healthcare of these individuals, and they were not required to accept all applicants.

Now, under the Affordable Care Act, insurers can no longer deny or charge higher premiums based on pre-existing conditions. This has dramatically improved access to health insurance for individuals with chronic health issues. However, there are still some exceptions to this rule.

The two main exceptions to the pre-existing condition rule are short-term medical policies and grandfathered individual health insurance plans. Short-term medical policies may not cover pre-existing conditions such as diabetes, cancer, stroke, arthritis, heart disease, mental health, and substance use disorders. Even if they accept your application, they may impose a waiting period before covering treatment for a pre-existing condition. Grandfathered plans are health plans that were in place before March 23, 2010, and by law, these plans can offer the same benefits today as they did before the Affordable Care Act. These plans may restrict or exclude coverage for pre-existing conditions.

It is crucial to understand how different health insurance plans cover pre-existing conditions. Navigating insurance options with a pre-existing condition can be challenging, and choosing the right plan with adequate coverage is essential.

Frequently asked questions