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.
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.
There are a range of useful mental health contacts and resources including:
Speak with an adviser or apply online for health cover today