Heath insurance terms and definitions
- Ancillary cover (also known as extras cover): Health cover for some or all of the cost of non-hospital treatments such as dental, optical, physiotherapy, chiropractic and osteopathy.
- Australian Government Rebate: An income-tested government rebate for Australians with private health insurance to help with the cost of their premiums.
- Benefit: The maximum amount you can claim for a particular service, represented as a dollar amount or a percentage amount (e.g $X or up to 75% of the cost).
- Benefit Limitation Period: Initial period of health membership when only limited benefits are payable for some types of treatments in return for a lower premium.
- Community rating: Community rating means that health insurance is available to all Australians at the same price regardless of their age or health. It is a way to stop health funds from discriminating against potential members on the basis of their health.
- Co-payment: A set amount that you agree to pay towards your daily hospital care in exchange for a lower premium.
- 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, providing you have not made a claim.
- Default benefits: The minimum level of benefits that private health funds must pay for treatment provided in a shared ward in a public hospital.
- Dependants: For the purposes of inclusion in family health cover, a dependant is defined as a single child under 17 years or a full-time student under 25 years living at home with no dependants of their own.
- Excess: The amount of a benefit a health fund member opts to contribute towards their hospital account in return for a lower premium.
- Exclusion: A service for which you are not covered for treatment and for which a benefit will not be paid (exclusions vary with health funds and policies).
- Fund: A private health insurance organisation registered under the Private Health Insurance Act 2007 in Australia.
- Fixed fee: A daily fee charged by some hospitals in addition to a co-payment or excess.
- Gap: The difference between the doctor's fee for services provided in hospital and the combined Medicare benefit and health insurance benefit paid (the gap must be paid by the insured).
- General dental: Minor dental services including check ups, teeth cleaning and fluoride treatment.
- Hospital cover: Covers the cost of treatment in hospital and varies with the level of cover purchased (e.g. Basic, Mid-Range or Comprehensive).
- Health care aids: Medical appliances provided to assist with the daily management of conditions such as diabetes, asthma and high blood pressure.
- In vitro fertilisation (IVF): A treatment for infertility where the egg is fertilised by sperm outside the body (often excluded from cover in health insurance policies).
- Inpatient: A patient who has been admitted to a hospital or day facility.
- Joint replacement: Surgical replacement of hips, knees, ankles, wrists, shoulders, elbows or spinal discs (cover varies widely with health insurance policies).
- Kinesiology: An alternative therapy employing muscle monitoring to identify imbalances in the body. It is used to treat stress, muscular, nervous and nutritional issues and emotional and learning and behavioural problems.
- Knee replacements: Knee replacement surgery is a technique that removes an impaired knee joint and replaces it with an artificial joint.
- Lifetime Health Cover (LHC): A government initiative to encourage people to take out hospital cover early in life. From your 31st birthday, premium costs rise 2% every year that you don’t have hospital cover, to a maximum of 70%.
- 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: Major dental procedures such as crowns, bridges, veneers, implants, dentures and orthodontia.
- Medicare Levy Surcharge (MLS): Means-tested, income based tax on people earning above a certain threshold who don’t have adequate private hospital cover (between 1% and 1.5%).
- Naturopathy: An alternative therapy based on a belief in vitalism, which advocates a holistic approach of non-invasive treatment and avoids the use of surgery or drugs.
- Network provider: A health care provider who has a contractual relationship with a health insurance company. In return for capped fees, the provider gains more patients and is often also paid a fee by the insurer.
- Optical: The service associated with the provision and repair of prescribed sight-correction appliances (glasses and contacts) and included by most health funds in their ancillary cover options.
- Orthodontics: The branch of dentistry specialising in problems associated with the alignment of teeth and jaws, often employing corrective appliances such as braces, plates and head gear.
- Out-of-pocket: An out-of-pocket expense, also known as a gap, is an amount you have to pay over and above what is covered by either your health insurance or Medicare. You may be able to find a fund that offers gap cover, which insures you against part or all of these costs.
- Pharmaceutical Benefits Scheme (PBS): A government scheme that subsidises the cost of medicine for most medical conditions, providing Australian residents with access to prescription medicines at lower cost.
- Pre-existing medical condition: Any medical condition a member is aware of prior to joining a health fund (usually attracts a 12 month waiting period).
- Qualifying event: An insured event that triggers a member’s protection under their policy (e.g. loss of employment, divorce or death).
- Quit Smoking: Some quit smoking programs are claimable on your extras cover.
- Referral: The process whereby a patient is authorised by their primary care physician to a see a specialist for diagnosis or treatment of their condition.
- Schedule fee: The fee for a particular service as published in the Department of Health’s Medicare Benefits Schedule Book.
- Specialist: A doctor who specialises in a particular field of medicine (e.g. opthamologist, neurologist etc).
- Temporary total disability: A condition where a person is unable to work due to a disabling injury, but is expected to fully recover.
- Theatre fees: Fees associated with procedures performed in an operating theatre or day surgery facility.
- Underwriting: The process by which an insurer determines the level of risk of an applicant and the associated cost of the monthly premium.
- Unemployment cover: A benefit payment offered by some health funds if a member becomes involuntarily unemployed.
- Valid from date: This is the date a new health insurance policy is available for purchase.
- Waiting period: The period of time you must wait after taking out cover before you can receive any benefits. The maximum waiting period a health fund can apply is 12 months (although you can wait up to two years for hearing aids).
- Waiver of premium: The exemption of a member from the need to pay premiums sometimes granted by a health fund in special circumstances such as permanent and total disability.
- Weight loss: Some weight loss programs are claimable through your health fund.
- X-ray/lab: Any diagnostic lab test or x-ray performed in support of basic health services. Lab tests include services like blood work and urinalysis and X-ray services include basic skeletal x-rays, ultrasounds, MRIs, and CT scans.
- Young adult dependants: Insurers may choose your children aged between 18 to 24 for a higher premium.
- Yearly limit: This is the maximum amount you are able to claim in a calendar year.
- Zero gap: A scheme in which participating doctors affiliated with a health fund charge a set fee, with the result that there is no gap between the Medicare benefit and health insurance benefit and therefore zero for the member to pay.
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