Health Insurance Glossary

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.


  • 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.



  • 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.



  • 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).
  • In-patient: 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.


  • 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.
  • 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.


  • 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.

Richard Laycock

Richard is the senior insurance writer at and is on a mission to make insurance easier to understand.

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