Does health insurance cover prescription medication?

Under the Pharmaceutical Benefits Scheme (PBS), Australians generally don’t pay full cost for a wide range of prescription medications purchased from pharmacies. Instead, we only pay part of the cost of the medicine, with the remainder subsidised by the government. But not all prescription medications are subsidised by the Government under the PBS.

Can I claim money back on prescription medication?

If you purchase a high-level extras cover policy from an Australian private health fund, your policy will most likely include some cover for the cost of prescription medication. Extras policies typically only provide cover for prescription drugs that are not subsidised under the PBS.

The level of cover provided varies depending on the extras policy you choose. In addition to annual limits on the amount you can claim for prescription medication, for example $500 per year, your health fund will also impose a sub-limit you can claim on each individual script. This could be a flat figure, for example $30 per script, or a maximum percentage of the cost of the script.

What type of cover will I need to claim for prescription drugs?

Health insurance can provide cover for both in-hospital prescription drugs and medications you receive when out of hospital. As a result, claims for prescription drugs can technically be filed under either a hospital cover policy or extras cover, so the policy that provides the cover you need will vary depending on whether you are an inpatient or an outpatient.

• Inpatient pharmaceuticals are included in hospital cover. Hospital cover policies provide cover for medications provided while you are being treated as an inpatient in hospital.
• Outpatient pharmaceuticals are included in extras cover. Extras cover from your health fund can be used to cover the cost of pharmaceuticals received out-of-hospital as an outpatient, and that are not listed on the PBS.

However, this article largely deals with cover for out-of-hospital pharmaceuticals, which is provided by extras health insurance.

In what circumstances can I claim money back?

In order to make a prescription medication claim on your extras policy, your doctor will need to prescribe medication that is not subsidised under the PBS. The medication must also:

• Cost more than $38.30
• Be a category S4 or S8 items (prescription-only medicines or controlled drugs)
• Be prescribed by a registered medical practitioner, dentist or nurse and only be available on prescription
• Be dispensed by a registered pharmacist
• Be approved by the Therapeutic Goods Administration for sale within Australia

You must also have served any waiting periods imposed by the health fund and your membership must be fully paid and up to date.

How do I go about making a claim?

The way you claim for the cost of prescription medication may vary depending on the extras claim options supported by your health fund. These include:

• On-the-spot claiming. This is done by swiping your health fund membership card.
• Online claiming. You can lodge a claim via the online members section of your health fund’s website.
• Mobile claiming. Many health funds offer quick and convenient claims apps.
• By post. You can download a claims form and return the completed form to your fund.
• In-person. You can also lodge claims by visiting one of your health fund’s retail centres.

Your claim must be accompanied by an official pharmacy receipt which includes:

• Your name
• The script number
• The name of the drug prescribed

When can’t I claim?

There are some situations where you cannot claim the cost of prescription medication on your private health insurance extras cover, including:

• If you have received the medications through the PBS or some other Government funding scheme.
• If the medication has not been approved for use by the Therapeutic Goods Administration.
• If the medication can be purchased without a prescription.
• If the medication is only dispensed via prescription to hospital in-patients (the cost of these drugs can be covered by hospital cover).
• If the drug is used as a contraceptive.
• If the drug is listed on your health fund’s exclusions list.
• If the medication is a compounded or experimental drug.
• If the medication is a natural remedy of any kind.
• If you have not served the waiting period imposed by your health fund for prescription medication.

What’s the difference between claiming on private health and on Medicare?

Regardless of whether or not you have private health insurance, you will only have to cover part of the cost of prescription medications purchased from pharmacies – the rest is covered by the PBS.

You will need to present your Medicare card in order to access subsidised medication under the PBS. However, if your doctor prescribes medication that is not listed on the PBS, you'll need to pay the full cost as Medicare will not provide cover.

However, you can take out a private health insurance extras cover policy to help cover the cost of non-PBS medications, but you will usually need to make a co-payment towards the total cost of medications.

Contact your health fund for details of the non-PBS medications included in cover and any limits that apply to your policy.