Does health insurance cover prescription medication?

Thanks to the Pharmaceutical Benefits Scheme (PBS), Australians don’t usually pay full cost for 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 – that's where private health insurance can help.

Can I claim money back on prescription medication?

Yes, mid-level extras cover can help pay for the cost of prescription medications. Extras policies typically only provide cover for prescription drugs that aren't subsidised under the PBS – which otherwise, without insurance, you'd have to pay the full price for.

Most policies let you claim between $200 and $500 per year for prescription medication. Some health funds 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.

How does health insurance cover prescription drugs?

Hospital cover

Inpatient pharmaceuticals are included in hospital cover. Policies can help pay for medications provided to you while you are being treated as an inpatient in hospital.

Extras cover

Mid-range extras cover can be used to cover the cost of non-PBS pharmacy items that are prescription-only and prescribed by a medical practitioner like your GP. This can include contraceptives for medical conditions, travel vaccinations, medically necessary hormonal implants and more.

When 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 (TGA) for sale within Australia

Extras that includes pharmaceutical cover doesn't usually have any waiting periods. However, hospital cover generally has a 2-month waiting period, or 12 months for pre-existing conditions.

How do I make a pharmacy 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 and the name of the drug prescribed.

When can’t I make a pharmacy 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 (TGA).
• 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?

Medicare

Public health services in Australia are provided by Medicare. Medicare only covers medication listed on the PBS. You'll need your Medicare card to access subsidised medication. The subsidy is usually included when you pay for it at the pharmacy. If your doctor prescribes medication that isn't listed on the PBS, you'll need to pay the full cost yourself.

Private health insurance

Private health insurance is essentially designed to cover the services that Medicare doesn't help out with. This can include medication prescribed by your doctor that isn't listed on the PBS. You might need to make a co-payment towards the total cost of medication. Some providers will allow you to claim your benefit on the spot at the pharmacy; others will reimburse you once you've submitted the claim online.

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FAQs about prescription medicine

• What is pharmacy cover?

  Pharmacy cover can encompass inpatient pharmacy (medication provided to you when you're admitted to hospital) and out-patient pharmacy (medication you buy outside of hospital). The former comes under hospital cover while the latter is included with many extras policies.

• Can you claim the pill on private health insurance?

  No, unfortunately private health insurance doesn't usually cover contraceptives unless it's for a medical condition (such as a hormonal condition). To get covered, you'll need to provide a letter from your doctor stating the contraceptive is being used to treat a medical condition. The medical condition must also be listed in MIMS as a condition that the drug is used to treat.

• What is the Pharmaceutical Benefits Scheme?

  The Pharmaceutical Benefits Scheme (PBS) is a government initiative which subsidises the cost of common medicines for Australian Medicare card holders.

  If a drug isn't listed on the PBS, private health insurance, specifically extras cover, can help out, so long as it's been approved by the TGA.