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Health care and medical treatment in Australia is covered by the public health system, Medicare, and a number of for- and not-for-profit private health funds.
Private health funds compliment Medicare by paying a benefit for procedures and treatments outside the scope of cover of the public health system, such as dental and optical treatments. Keep reading to find out more about how health funds works.
There are four types of health cover available in Australia: hospital, extras, combined hospital and extras and ambulance-only cover.
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Health funds can be either for-profit or not-for-profit.
Not-for-profit health funds are run to benefit members rather than shareholders. These types of private funds claim to provide their members with a wider scope of cover, lower premiums and greater benefits for covered items.
One way this can be achieved is through tax exemptions. For-profit funds are not eligible for the income tax assessment exemptions that not-for-profit funds are.
GMHBA and HIF are two of the many not-for-profit health funds available to the Australian public.
Typically, the differences between not-for-profit and for-profit health funds can include:
There are different processes to follow for claiming a hospital treatment or an extras treatment.
The way you make a hospital claim will depend on whether or not you’re being treated at one of your fund’s member hospitals.
If you’re in a member hospital, the bill will be sent straight through to your health fund. If you’re in a non-member hospital, you may get the bill sent to you, which you will then need to forward onto your fund. Your claim will also depend on whether or not your treating doctor is a part of your fund’s gap cover agreement.
This agreement between the doctor and your health fund ensures that your fund will cover any extra costs charged by your doctor above the Medicare Benefits Schedule (MBS). If your doctor is not part of this agreement, you will need to cover any out-of-pocket expenses.
You can view a list of member hospitals and gap-cover doctors specific to your health fund on your provider’s website. The biggest health funds have the largest number of member hospitals and gap-cover doctors in each state.
If you’re claiming for extras, most eligible providers will allow you to claim on the spot with HICAPS. If your provider does not support HICAPS you may be able to:
Membership requirements vary amongst different health funds. Under the Private Health Insurance Act (2007), a health fund can register as an open or restricted fund.
Not-for-profit health funds offer open membership, meaning Australian citizens, permanent residents and temporary residents are eligible to apply to become a member and get cover.
For-profit health funds offer restricted membership, meaning only some people can become members. Membership may be restricted to a company or a union, for example, Commonwealth Bank operates a health fund for employees called CBHS and Teachers Health Fund provides health insurance for members of the education industry.
Membership is often extended to family members of eligible applicants as well as people who were previously a member of the company, union or group.
Health funds operate similarly on a national basis, however, there are slight differences in the cost of cover and access to facilities between states. For example, you’ll find residents in Victoria pay higher premiums than residents in other parts of the country.
On average, restricted member funds have a high member retention rate. However, this indicator is likely to be attributed to workplace arrangements.
Open Member Funds | Restricted Member Funds |
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Source: ombudsman.gov.au
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