Basic hospital cover
Basic hospital cover: What can you expect from the base tier of hospital health insurance?
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Basic hospital insurance is the lowest of four tiers of hospital insurance: Gold, Silver, Bronze and Basic. These tiers came into effect on 1 April 2019 and all health funds will need to classify their policies into these tiers by 1 April 2020. They are part of a range of health insurance reforms aimed at making health insurance more affordable and easier to understand.
What is basic health insurance?
As part of private health insurance reforms, health funds will have to split their hospital policies into four tiers – Gold, Silver, Bronze and Basic – by April 1st 2020. There are 38 clinical categories in total and each tier of cover has minimum coverage requirements. Put simply, this means that Basic tier hospital cover is required to offer you the least amount of services. In fact, a basic tier policy is only obligated to have restricted cover for Rehabilitation, Hospital psychiatric services & Palliative care.
Here you can find four of the cheapest Basic hospital options from Finder partners. All prices are based on a single person living in Sydney, with a $500 excess. They cover emergency ambulance and would make you exempt from the Medicare levy surcharge (MLS) at tax time.
Interested in Basic hospital cover? Compare your policy options
Not a whole lot. Basic tier hospital is only required to provide members with cover for:
- Hospital psychiatric services
- Palliative care
However, these benefits may be offered on a restricted basis, meaning you may face out-of-pocket costs for treatment.
As part of the reforms, funds can offer restricted cover for all clinical categories for Basic tier policies. These categories are:
- Assisted reproductive services
- Back, neck and spine
- Bone, joint and muscle
- Brain and nervous system
- Breast surgery (medically necessary)
- Chemotherapy, radiotherapy and immunotherapy for cancer
- Dental surgery
- Diabetes management (excluding insulin pumps)
- Dialysis for chronic kidney failure
- Digestive system
- Ear, nose and throat
- Eye (not cataracts)
- Gastrointestinal endoscopy
- Heart and vascular system
- Hernia and appendix
- Implantation of hearing devices
- Insulin pumps
- Joint reconstructions
- Joint replacements
- Kidney and bladder
- Lung and chest
- Male reproductive system
- Miscarriage and termination of pregnancy
- Pain management
- Pain management with device
- Plastic and reconstructive surgery (medically necessary)
- Podiatric surgery (provided by a registered podiatric surgeon)
- Pregnancy and birth
- Sleep studies
- Tonsils, adenoids and grommets
- Weight loss surgery
What is basic plus (+)?
As part of the health insurance reforms, policies outside of the gold tier offer "Plus [+]" options, in this case a Basic Plus [+] policy. All this means is a policy with Plus [+] is a policy that provides cover above the minimum requirements of the Basic tier. For example, HIF offer a Basic Plus policy that in addition to the minimum benefits required for a basic policy, HIF Basic Plus offers benefits for tonsils, adenoids and grommets, joint reconstructions and hernia and appendix.
Because of the limited nature of cover available under a Basic tier policy, this low-cost option is best suited to people in two specific situations.
A Basic policy is more akin to your "junk" policies and is only really beneficial to those trying to avoid being pinged for not having health insurance. In particular, if you're earning over $90,000 and want to avoid the MLS, and that is your only need from your hospital insurance policy, then a Bronze or Basic policy would fit the bill. The same goes for those trying to avoid the lifetime health cover (LHC) loading or those wanting a deduction for their tax return.
- Medicare levy surcharge (MLS). High-income earners (more than $90,000 for singles and $180,000 for families) must pay an extra 1–1.5% in tax unless they have adequate private hospital cover with an excess of no more than $500 for singles and $1,000 for families.
- Lifetime health cover (LHC) loading. A 2% loading on your private health cover for every year after you turn 31 that you don't have adequate private hospital cover.
You don't live near a private hospital
This logic carries through for those who don't live near a private hospital. If you're never going to use your benefits in a private hospital you may want to opt for the Basic option if you're earning over $90,000.
The new Basic tier for hospital insurance comes into effort on 1 April 2019 but health funds have until 1 April 2020 to make all of their products compliant.
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