Psychology session

Is Mental Illness Covered by Health Funds?

What you need to know about mental health treatment and private health insurance.

While those who have been treated for a mental illness can often have difficulty obtaining general insurance (particularly income protection and travel insurance), private health insurance does cover some of the treatment costs for mental illness, although the level of cover varies widely with insurers.

This guide looks at how to shop wisely for insurance with a mental illness, what cover is available, what other assistance is out there in the community and what’s being done to bring mental health up to speed with the rest of the healthcare system.

What is mental illness?

Mental illness is defined as a health problem which significantly affects how we think, feel and behave. One in five Australians will experience a mental illness and one in two of us will experience a mental health problem at some time in our lives.

Some of the main types of mental disorders include:

  • Mood disorders (e.g. depression, bipolar disorder)
  • Anxiety disorders (e.g. agoraphobia, claustrophobia)
  • Personality disorders (e.g. paranoia, obsessive-compulsive disorder)
  • Psychotic disorders (e.g. schizophrenia)
  • Eating disorders (e.g. anorexia, bulimia)
  • Trauma-related disorders (e.g. post-traumatic stress disorder)
  • Substance abuse disorders (e.g. alcoholism, drug addiction)

Private hospital insurance for psychiatric services and rehabilitation

If you are admitted to a private hospital for treatment or rehabilitation for a mental illness, it is possible to obtain cover under private hospital insurance. This will cover the cost of accommodation as a private patient, psychiatric services and rehabilitation, depending on the policy. Unlike other pre-existing conditions which are only covered after a 12 month waiting period, mental illness is covered just two months after purchasing a policy.

However, not all policies provide full coverage and there may be a difference between what is covered and what you will have to pay yourself. This could include the cost of psychiatric consultations outside of hospital or an excess or co-payment for some hospital services, so it pays to check your policy carefully before purchase to ensure you have the cover you need.

Compare your health insurance options online

Can I get a Medicare rebate or private health fund rebate for psychologists’ fees?

While treatment by a psychiatrist is covered by Medicare, if you see them as a public patient in a public hospital or clinic, treatment by a psychologist is only covered by Medicare when it is part of a government scheme and only if you are referred by a psychiatrist or GP.

Most private health funds offer cover for psychologists’ fees, but the level of cover varies and only the more comprehensive policies tend to include full cover for psychological services.

Insurance shopping tips

If you have been treated for a mental health problem and are looking for insurance, the following tips can help you find the right cover for your needs:

  • Rather than filling out an online form (and possibly disqualifying yourself from cover), call the insurer and put your case to a representative in person.
  • Find out the insurer’s stance on mental illness; how they define it, what is included and excluded in their policy and whether you will need to pay an additional premium to obtain cover.
  • Read the Product Disclosure Statement (PDS) carefully, as the devil is in the detail. Make sure the cover you need is clearly stated in writing before purchasing a policy.

Does my extras cover psychology?

Many health funds provide optional cover for psychology services and counselling in their extras packages. The percentage of costs they will pay will depend on the policy and whether the psychologist is a preferred provider who is registered with the health fund.

Is community care available?

As well as help from psychiatrists and psychologists, those suffering from mental illness can also receive assistance from health professionals in the wider community such as doctors, social workers, therapists and community health workers.

Community mental health services are free and offer specialised help for different groups experiencing their own unique problems, such as the elderly, young people and the homeless. Organisations such as Lifeline also provide counselling, not only for those affected by mental illness, but for those who care for them as well.

State of mental healthcare in 2016

While mental healthcare falls short in a number of areas, a recent government shakeup of the mental health system will see the following reforms put in place:

  • Mild mental health problems. More help to be provided through online counselling services.
  • Moderate mental health problems. Medicare subsidies will be provided for visits to a psychologist.
  • Severe mental health problems. A care plan will be organised by the patient’s Primary Health Care Network and will include psychological services, mental health nursing, drug & alcohol services, vocational assistance and peer support.

A new Mental Health Hotline will also be set up to direct people to the appropriate services and to co-ordinate the existing government-supported mental health phone services.

Frequently asked questions about mental illness and health insurance

Do you need a doctor's referral to see a psychologist?

No, but you will need a Mental Health Treatment Plan from a GP to claim a Medicare rebate.

Are psychiatrists covered by health insurance?

Yes, many health funds cover psychiatric visits, but you will need to be referred by a GP.

How much can a psychologist charge for services under Medicare?

Psychologists can set their own fees, but the Medicare rebate is a set amount.

How are Medicare fees and rebates determined?

The government sets the Medicare schedule fees and indexes them on 1 November each year. Rebates for psychology services are set at 85% of the schedule fee.

Can a trainee psychologist provide psychological services under Medicare?

No, only a psychologist registered with the Psychology Board of Australia is eligible to provide services under Medicare.

Can other health professionals provide mental health services under Medicare?

Yes, social workers and occupational therapists with the appropriate mental health expertise can provide some of these services.

Can psychological services be provided over the telephone?

They can, but to qualify for a Medicare rebate, they must be provided face to face.

Which psychological services are included in the maximum number of services I can receive per year?

You can receive up to 10 individual psychological services a year including services by psychologists and eligible social workers, occupational therapists and GPs.

Can I use my private health extras cover to pay the gap between the Medicare rebate and the psychologist’s fee?

No, you must decide if you will use Medicare or your ancillary cover to pay for the psychological services you receive.

When will the Medicare rebate not be paid for services provided by a psychologist?

If they are not an eligible psychologist (i.e. have no Medicare Provider Number), if you were not referred to them by a psychiatrist or GP or if you have exceeded the number of services per year you are entitled to.

Useful contacts

There are a range of useful mental health contacts and resources including:

  • beyondblue. beyondblue provides information and support to help Australians achieve their best possible mental health, regardless of their age or where they live.
    Website: beyondblue.org.au
    Phone: 1300 22 4636
  • headspace. headspace offers early intervention mental health services for 12 to 25 year olds.
    Website: headspace.org.au
    Phone: 1800 650 890
  • The Mental Health Services in Rural and Remote Areas  (MHSRRA). The MHSRRA program provides funding to non-government health organisations to deliver mental health services to those in rural and remote areas.
    Website: health.gov.au
  • MindSpot Clinic. The MindSpot Clinic is a national clinic providing free online and telephone assessment and treatment for Australian adults suffering from stress, anxiety and depression.
    Website: mindspot.org.au
    Phone: 1800 61 44 34
  • mindhealthconnect. mindhealthconnect provides information for carers about mental health conditions.
    Website: mindhealthconnect.org.au
  • Black Dog Institute. The Black Dog Institute carers how to help someone with depression or anxiety.
    Website: blackdoginstitute.org.au
  • National Eating Disorders Collaboration (NEDC). The NEDC provides advice to carers on how to help someone with an eating disorder.
    Website: nedc.com.au
    Phone: 1800 33 4673
  • My Aged Care. My Aged Care provides help and advice for those caring for older people with a mental health condition
    Website: myagedcare.gov.au
    Phone: 1800 200 422
  • Carers Australia. Carers Australia offers support for carers of those with a range of health issues, including mental illness.
    Website: carersaustralia.com.au
    Phone: 1800 242 636

Speak with an adviser or apply online for health cover today

Rates last updated December 8th, 2016
Details Features
High 65 / 75 / 85% - $0/$250/$500 Excess
High 65 / 75 / 85% - $0/$250/$500 Excess
Combines High Hospital Cover with its highest level of extras cover.
  • Cover starting from $44.74 weekly
  • 12 month waiting period for pregnancy
  • 65% back on extras
  • Choice of $0, $250 and $500 excess
Enquire Now More info
Premier Package
Premier Package
Top tier combined hospital and extras policy that covers you for an extensive range of hospital and general treatment services.
  • All the benefits of HCI's Premier Hospital policy
  • All the benefits of HCI's Premier Extras policy
  • Cover for pregnancy and IVF treatment
  • Cover for general and major dental
Get Quote More info
Deluxe flexi
Deluxe flexi
Deluxe flexi provides cover for a range of treatments including hip replacement, spinal fusion, dialysis and major eye surgery.
  • No excess for kids
  • All joint replacements
  • Major eye surgery
  • Rehabilitation
Enquire Now More info
GoldStar
GoldStar
Premium hospital cover with complete cover for hospital expenses. Save 4% when you pay for 12 months of your cover upfront.
  • All theatre fees covered
  • Unlimited maternity cover
  • Choose no excess or $200, $400, $500 per admission
Get Quote More info
Smart Combination
Smart Combination
Smart combination provides a high level of cover for both hospital and extras.
  • Claim up to $2725 back on extras
  • Hip and knee replacements
  • General and major dental
  • Physio
Enquire Now More info
Prestige
Prestige
Highest level of combined cover offered by CBHS. Includes the same benefits as Comprehensive Hospital and Top Extras plus more. Restricted fund: Only current or former staff (and their families) of Commonwealth Bank Group and their subsidiaries which include Aussie, Bankwest, Colonial First State and more can join.
  • No excess or co-payments on hospital cover
  • Non-student dependent under 25 can be kept on policy
  • Access to Chronic Disease Management Programs
  • Widest range of extras including orthodontics
Enquire Now More info
Bronze Hospital (no pregnancy) and Bronze Extras Set Benefits
Bronze Hospital (no pregnancy) and Bronze Extras Set Benefits
High level of hospital cover and extras cover for a range of popular services including knee and should reconstructions.
  • Most comprehensive hospital options
  • Cover for general and major dental
  • Shared or single room in a private hospital
  • Intensive and coronary care
Enquire Now More info
Premium Hospital and Silver Extras Cover
Premium Hospital and Silver Extras Cover
Comprehensive hospital cover including pregnancy cover. Also included affordable mid-level extras cover for dental, optical and therapies.
  • Cover from $39.50 per week
  • Pregnancy and birth-related services cover
  • Heart surgery cover
  • 100% cash back on two dental check per year
Enquire Now More info
Top Hospital with Top Extras
Top Hospital with Top Extras
Get comprehensive hospital and extras cover and tailor your policy to your needs.
  • Pregnancy and birth services cover
  • Back surgery cover
  • $1000 general dental annual limit
  • $600 physiotherapy annual limit
Enquire Now More info
Young Couples Combined Cover
Young Couples Combined Cover
Mid-level hospital and basic level Extras package with an excess for young, healthy couples that are not quite ready to start a family.
  • Emergency ambulance cover
  • Cancer-related surgery cover
  • 70% back on extras
  • $300 dental annual limit per person
Enquire Now More info

Picture: Shutterstock

Richard Laycock

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

Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback