Understanding your cover from A to Z.
Don’t let health insurance be any more complicated than it needs to be. Brush up on your lingo and start navigating the world of health insurance like a pro!
- Ancillary / extras cover: A type of policy that provides health service benefits that are not typically covered by Medicare or private hospital policies. Services that are commonly included in extras cover include dental, optical, physiotherapy, chiropractic and even some types of massage.You can take out extras cover by itself or alongside a private hospital policy. As with hospital policies, extras policies come in all shapes and sizes. That means that if there is a specific extras service you need to have covered, you'll need to make sure your plan offers it.
- Australian Government Rebate: To help with the cost of private health insurance, the Australian Government provides this rebate to most Australians who take out private policies. The rebate is income-tested so the less you make, the higher your rebate will be.You can receive the rebate in the form of a premium reduction, a tax rebate or a direct payment through Medicare.
- Benefit: The amount your health insurer pays you or the medical service provider for services covered by your hospital or extras policy. Your policy will list a maximum benefit amount you can receive per health condition per year, but the actual benefit payout will depend on the cost of the services you received, any contract stipulations (e.g. "the insurer will pay up to 75% of the cost") and whether or not you've already reached the limit for that type of claim.
- Benefit limitation period: The period of time you must wait after purchasing or upgrading a policy before you can receive the full benefits for a particular service or treatment. If you make a claim before this period of time, your insurer will pay the default benefits, which are usually equal to the accommodation fee a public hospital would charge to admit a private patient to a shared room. This is different to a waiting period, which is usually shorter than a benefit limitation period but doesn’t pay a default benefit.
- Claim: Your request to the insurer to pay you or the medical service provider for any treatment or service that is covered by your policy.
- Co-payment: A set amount that you agree to pay towards your daily hospital care in exchange for a lower premium. This is different from your excess, which is the upfront contribution you've agreed to pay for each single admission. Co-payments and excesses are sometimes capped, meaning you won't be required to pay anything above those capped amounts no matter how many hospital visits you make.
- Community rating: A concept that underpins the entire Australian private health insurance system, prohibiting insurers from raising their rates or declining to cover someone based on that person's health, medical history or age. Giving Australians equal access to private health care allows people to get the care they need and reduces the burden on the public health system.
- Cooling-off period: A period of time after purchasing your health insurance during which you can cancel your policy and receive a full refund of your premium, provided you have not made a claim. Most insurers offer a 30-day cooling-off period.
- Default / minimum benefits: An option on some basic policies that provides only the minimum amount of cover for certain conditions, usually equal to the accommodation fee a public hospital would charge to admit a private patient to a shared room. Depending on the condition and the treatment you receive, your total bill could far exceed the amount covered by a default benefit.
- Dependants: Children covered by their parents' family health insurance policies. If your policy covers dependants, it will cover them until they turn 18, although most insurers will allow dependents to remain on your policy until they turn 21. It is also common for insurers to allow them to remain on your policy until they turn 25 as long as they are studying full-time at a recognised educational institution.Regardless of their age, dependants will usually not be covered if they are married, are in a de facto relationship or have dependants of their own.
- Diagnostic / medical tests: Lab tests conducted to determine the cause of an illness, ailment or condition. Tests can include fluid sampling (e.g. blood and urine), imaging studies (e.g. X-rays, CT scans, ultrasounds and MRIs) and electrical impulse testing (e.g. electrocardiograms to test the heartbeat).
- Excess: A set amount that you agree to pay for each single hospital admission. This is different from your co-payment, which is the set amount that you agree to pay towards your daily hospital care. Excesses and co-payments are sometimes capped, meaning you won't be required to pay anything above those capped amounts no matter how many hospital visits you make.
- Exclusion: A health-related service that your private health insurance policy does not cover at all, and for which you will receive no private benefits. You may be eligible for Medicare benefits, but you will be subject to longer wait times and out-of-pocket expenses, especially if treated in a private hospital. Exclusions vary among health insurers and among policies.
- Fixed fee hospitals: Your insurer may have its own "network" of hospitals with which they have agreements in place to offer you certain benefits at no cost to you. In other cases, they may have agreements with hospitals outside of this network to offer the same set of benefits, but only if you pay a predetermined out-of-pocket fee. The hospitals in this second group are known as "fixed fee" hospitals, and the fee is charged in addition to any excess and/or co-payment you are responsible for.
- Gap: Any remaining balance after both the Medicare benefit and your health insurance benefit have been paid toward your treatment as a private patient. You are responsible for this balance in addition to any excesses and co-payments you've agreed to. Your insurer may have "gap cover" arrangements in place with certain doctors that will waive this gap.
- General dental cover: Private health cover for minor dental services like check-ups, teeth cleaning, fluoride treatments and small fillings. General dental cover usually doesn't cover more extensive procedures like tooth removal or crowns.
- Health fund: A private health insurance provider registered under the Private Health Insurance Act 2007. Funds are monitored by the Private Health Insurance Administration Council (PHIAC) to ensure they can meet their monetary obligations to policyholders.
- Health insurance: A contract that protects you against financial loss due to the high cost of health care. When you enter this contract with an insurance company, they are selling you a policy that describes what health-related services they will pay for should you require them. In return you pay them a monthly fee known as a premium.Health insurance and private health insurance are interchangeable terms in Australia. That's because any organisation offering health care outside of Medicare is privately run.
- Healthcare aids: Medical appliances that assist with the daily management of conditions. Examples include hearing aids, pacemakers, prosthetic limbs, insulin pumps, wheelchairs and asthma inhalers.
- Hospital cover: A type of policy that covers the cost of medical treatment when you are admitted into a hospital as a private patient. You will receive private health insurance benefits for only those conditions, treatments and services listed in your policy.
- In-vitro fertilisation (IVF): A form of assisted reproductive services (ARS) for women who have difficulty conceiving children. In IVF, the woman's egg is fertilised by sperm outside of the body and then re-implanted into the woman's uterus or into the uterus of another woman known as a surrogate mother. This procedure is usually only covered under top-tier health policies and will most likely involve a waiting period before you can claim.
- Inpatient: Anyone who has been admitted as a patient to a hospital or day facility. This does not include emergency room visits.
- Joint replacement: Surgery that removes part of a damaged joint and replaces it with a new joint made from synthetic materials like ceramic, metal or plastic. This helps alleviate pain and restore proper movement to the joint. Joint replacements are usually only covered under higher tiered plans, especially for complex joints like hips and knees. Other joints that are commonly replaced include ankles, shoulders, wrists, elbows and even fingers.
- Kinesiology: An alternative therapy that monitors muscle movement to identify the root causes of bodily imbalances. It works with this information to help treat a number of wellness issues ranging from muscular disorders to nutritional issues to behavioural problems.
- Lifetime Health Cover (LHC): A government initiative that encourages people to take out private hospital cover early in life and to maintain that cover, so that the private healthcare system has a strong base of support.Those who wait until they are older to get private health insurance will incur a 2% "loading fee" on top of their premium for every year past the age of 30 that they went without cover (for a maximum of 70%). That means if you wait until you are 40 to get private cover for the first time, you'll be paying 20% more for your policy than someone your age who first took out cover when they were 30. After 10 years of continuous coverage, your loading fee will be removed. Some very specific groups of Australians may be exempt from loading altogether.
- Limited benefit: A service which is covered at a reduced rate (e.g. treatment as a private patient in a public hospital but not in a private hospital).
- Major dental cover: Cover for dental procedures that are much more complex than those you'd find in a general dental policy. Major dental procedures include crowns, bridges, veneers, implants, dentures and orthodontics. However, not all major dental policies cover all of these services. For example, some insurers will require you to take out additional cover for orthodontics.
- Medicare Levy Surcharge (MLS): A tax on high income earners who do not have private health insurance. It was designed to ease the burden on the public system and it only affects taxpayers who earn above a certain threshold.
- Naturopathy: An alternative therapy based on the belief that the body can heal itself when treated with gentle therapeutic techniques and natural methods. Some private extras policies will offer benefits for naturopathy, but the specifics will differ among policies.
- Network provider: A healthcare provider that has a contractual relationship with a health insurance company to offer certain benefits to policyholders. By visiting one of your insurer's network providers instead of a provider outside of the network, you may be eligible for capped fees, higher rebate percentages, lower out-of-pocket costs, discounts and other perks.
- Optical cover: Cover for eyesight corrective devices and services related to them. Most health funds' extras policies offer optical cover, which will provide benefits toward eye exams, prescription lenses, prescription frames and prescription contacts.
- Orthodontics cover: Cover for a dental procedure associated with aligning your teeth and jaws, often using corrective appliances like braces and headgear. Orthodontics cover is considered part of extras cover, but it will usually require you to pay an additional premium on top of your standard extras policy.
- Out-of-pocket: The amount you have to pay over and above what is covered by your health insurance and/or Medicare. This can include your gap, excess, co-payments and charges for items and services that aren't covered by Medicare or your health insurance policy (such as certain prescriptions).
- Pharmaceutical Benefits Scheme (PBS): A government scheme that subsidises the cost of medicine for many medical conditions, providing Australian residents with access to prescription medicines at lower cost. It maintains a list of included medications that residents and certain overseas visitors can obtain (with a prescription) at a reduced cost. It also covers free prescriptions for pensioners and free prescriptions for a number of life-saving and disease-preventing drugs.
- Pre-existing medical condition / ailment / illness: The pre-existing ailment rule of the National Health Act of 1953 states that a pre-existing condition is an ailment, illness or condition for which reasonably apparent symptoms appeared at any time during the six months prior to you purchasing or upgrading your policy.You are required to wait 12 months after joining or upgrading your policy before you can make a claim on a pre-existing condition. That means if you are admitted to the hospital for any condition within the first 12 months, your insurer can appoint a medical practitioner to investigate whether or not the condition was pre-existing. If it is found to be pre-existing, your claim will be denied. After the 12-month waiting period, you will be able to claim against that condition as normal.
- Premium: The upfront cost of your policy, usually paid monthly.
- Product disclosure statement: A document that specifies a health insurance policy's terms and conditions, including product features, situations covered, benefit amounts, policy exclusions and costs. Australian financial institutions, including insurers, are required by law to provide a PDS for any financial product they offer.It is important to read the PDS of any insurance you are considering because it can highlight key differences between policies that may not be apparent at first glance. Reading it also ensures that you are fully aware of the conditions of the policy you choose. You can find the PDS for most policies on the provider's website, or you can request one directly from them.
- Qualifying event: Any event that is covered by your insurance policy. For example, your policy may exclude certain medical conditions unless they were sustained in an accident. If your insurer agrees that your condition was caused by an accident, it can be considered a qualifying event.
- Referral: When your GP recommends that you see a specialist for diagnosis or treatment of a condition and signs a document authorising the visit.
- Schedule fee: The maximum amount Medicare will pay for a service, all of which are listed in the Medicare Benefits Schedule (MBS). If you receive a health-related service that is on this list, Medicare will pay anywhere from 75% to 100% of the listed schedule fee for that condition, based on the type of provider you are seeing and whether you are a public or private patient. You and/or your private healthcare provider are responsible for the difference.
- Specialist: A doctor with advanced training in a particular field of medicine, such as neurology or optometry. You usually need a letter of referral from your GP in order to see a specialist.
- Theatre fees: Fees associated with the use of an operating theatre or day surgery facility. When you undergo surgery, you not only incur charges for the surgery itself but also for a number of other associated services. One of these services is the "hire" of the space, or theatre, where the surgery takes place.
- Underwriting: The process by which an insurer determines the level of risk associated with an applicant or with their pool of applicants as a whole. This process allows them to determine the cost of premiums. Private health insurers in Australia cannot adjust the price of individual premiums based on your personal risk factors, so their underwriting activities are limited to how they determine yearly member-wide premium increases.
- Valid from date: The date a new health insurance policy is available for purchase.
- Waiting period: The period of time you must wait after purchasing or upgrading a policy before you can make a claim and receive any benefits for a particular service or treatment. When you take out a policy, there will usually be a waiting period for most conditions, but it differs from condition to condition and from insurer to insurer.Waiting periods can be as little as zero or one day for completely unexpected events like accidents. Most insurers apply a 2-month waiting period for other hospital treatments and up to 12 months for pregnancy-related services and pre-existing conditions. By law, insurers must waive your waiting period if you've already served it with another insurer and are switching to the new insurer at a similar level of cover.
- Weight loss / bariatric surgery cover: Cover that provides benefits toward any number of weight loss surgeries including gastric banding, gastric bypass, liposuction, sleeve gastrectomy and gastric banding reversal. Not many insurers offer this cover in their basic policies, so in most cases, you will have to purchase a higher tiered policy.Weight loss surgery is reserved for people with a body mass index (BMI) of at least 30, which is considered obese. There will most likely be a 12-month waiting period as obesity is considered a pre-existing condition.
- X-ray: A diagnostic lab test that uses high-energy electromagnetic waves (radiation) to produce images of internal organs. Standard X-rays are best at creating images of the dense organs like bones. CT scans are high-powered, computer-enhanced X-rays that can create more detailed images of softer tissue.
- Yearly / annual limit: This is the maximum amount you are able to claim per condition or treatment in a calendar year. It is essentially just the benefit amount listed in the schedule of benefits, which can be found in your policy's product disclosure statement (PDS).
- Zero gap: A scheme in which participating doctors affiliated with a health fund charge a set fee for a particular service. This allows the Medicare and health insurance benefits to cover the full cost of the service, leaving no gap for the member to pay for that service.
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