Private Health Insurance
The Australian Government provides a basic universal health insurance, Medicare. Private health insurance in Australia is limited to those services not covered by Medicare or to services provided in private hospitals.
Private health insurers are regulated by the Private Health Insurance Administration Council (PHIAC). The primary federal legislation is the Health Insurance Act 2007 (Health insurance prudential regulation and consumer protection).
How it Works
There are two types of private health insurance
- hospital policies cover you when you go to hospital, while general treatment policies (sometimes known as ancillary or extras) cover you for ancillary treatment (e.g dental, physiotherapy).
Most health funds offer combined policies that provide a packaged cover for both hospital and general treatment services, or you can buy separate hospital and general treatment policies to 'mix and match'.
Hospital Cover
Hospital policies help cover the cost of in-hospital treatment by your doctor and hospital costs such as accommodation and theatre fees. Generally, any medical services listed under the Medicare Benefits Schedule (MBS) can be covered on some form of private hospital insurance. All policies, including top, medium and basic hospital cover encompass treatment with chemotherapy. Funds generally offer several different policies across these categories, combined with different levels of excess or co-payments.
An excess is amount that you agree to pay towards the cost of hospital treatment, in exchange for lower premiums. You may be required to pay an excess every time you go to hospital, or only the first time, depending on the private health insurance policy you take out. A co-payment is where you agree to pay a set amount for each day you are in hospital, in exchange for lower premiums - for example, you agree to pay the first $50 per day in hospital.
Gap Payments
A 'medical gap' is any out-of-pocket expense incurred by a patient for their medical treatment during their stay in hospital, reflecting the difference between the total fee charged by the doctor and any Medicare rebate plus health fund benefit.
The doctors at Oncology Clinics Victoria have entered into arrangements with most private insurers to cover all of your doctor's charge, meaning you will not have to contribute towards the doctor's bill out of your own pocket. In most cases you will never see a bill for chemotherapy and other day and inpatient treatments. Please clarify this with your insurer, as there are rare exceptions.
Government surcharges & incentives
The Australian Government has introduced the Private Health Insurance Rebate to encourage people to take out and maintain private health insurance. The rebate offers at least 30% on your insurance costs. If you purchase hospital cover after the 1st of July following your 31st birthday, you will have to pay the Lifetime Health Cover (LHC) loading on top of your premium.
The loading increases for every year you are aged over 30. If you are not covered by a private hospital insurance policy and you earn above a certain income threshold, you may have to pay the Medicare Levy Surcharge when you lodge your tax return.
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