Understanding your health insurance and hospital cover options is vitally important – you never know when you will need it! Here we go over the ins and outs of hospital cover and outline the benefits and disadvantages of it to better inform your decision making
Hospital cover is a form of policy within private health insurance which covers patients so they can be treated as a private patient in private and public hospitals. This cover helps pay for the cost of hospital treatments by a doctor of the patient’s choosing, hospital accommodation to stay in a given ward, and the associated theatre fees if surgery is necessary. Hospital cover will also include cover against most types of elective surgery, plus emergency or medically required surgeries.
The primary benefit of extras cover is preventative treatment which can improve your overall health. When properly taken advantage of, extras cover can prove immensely beneficial to your health and finances should you claim back your full benefits.
The difference between extras and hospital cover is that extras cover is steered towards non-essential services and treatments which help avoid injury or illness. This will help prevent the need for use of your hospital cover towards more serious minor or major medical treatment in hospital or at your GP. If you’re looking for complete comprehensive cover and to be best insured for both essential and non-essential medical treatment, combined cover is often the best option.
Hospital cover products are now offered in four different tiers of coverage. These are:
Health funds can also provide cover for additional categories under the basic, bronze and silver tiers; these covers are known as basic, bronze, silver or gold ‘Plus’. For a full detailed list of each tier’s included clinical categories, click here.
When comparing hospital cover policies, it’s most important to figure out what policy factors are critical to you and your health situation. If you have a certain medical condition, you will need to prioritise that when choosing your cover. You may also need to ask yourself some basic questions such as:
When you know what policy inclusions you need and have made a financial decision on the excess you are willing to pay – or if you wish to have an excess option at all – you can begin comparing hospital cover options thoroughly.
While cheap hospital cover options may jump out to you and offer significant savings each month, you need to make sure you have the right hospital cover to avoid any frightening charges in the future. A cheap basic hospital cover option might look sufficient as it covers the most common and basic medical treatments or services, however, if an unlikely medical event occurs, you might be left wishing you had chosen otherwise when faced with an expensive medical bill which Medicare won’t cover in its entirety.
As a general rule, hospital cover policies will insure against any hospital or medical services which are featured in the Medicare Benefits Schedule (MBS). These services include:
Inclusions under hospital cover will vary between policies so it’s important to read and understand your policy’s terms and conditions and its Product Disclosure Statement (PDS).
The exclusions of your hospital cover will depend on the tier of cover you opt for. Common exclusions for more basic hospital cover can include:
Contact a health insurer directly or once again read up on the relevant hospital cover’s terms and conditions and/or PDS to get a complete understanding of the relevant restrictions and exclusions.
The costs for hospital cover range significantly depending on the tier of your cover, your health condition, and your state or territory of residence. A rough guide to the expected costs of hospital cover based on a hospital cover only policy without extras is as follows:
| Hospital cover tier | Hospital cover cost (per month) |
| Basic | $70-$85 |
| Bronze | $88-$107 |
| Silver | $110-$150 |
| Gold | $150-$170 |
Identify any medical conditions you will need covered under your hospital cover policy. This could be for you as an independent, couple or a family. In addition, consider the excess you are willing to pay on your hospital cover or if you wish for an excess at all. Bear in mind, no excess will increase the cost of your premium considerably. Lastly, figure out the premium price of hospital cover that you can afford based on your budget.
Compare your options thoroughly, making sure to account for inclusions relevant to your health situation. Also, keep an eye out for special deals and discounts as health insurers are always striving to gain new business. When choosing your cover, read the terms and conditions and the PDS thoroughly.
Once you have settled on a hospital cover policy option that is right for your health and financial situation, it is important you continue to check and review your cover regularly. As your personal situation changes, be it your income increases, you start a family, develop health conditions, or improve prior health conditions, you might need to update your hospital cover.
Allows you to choose a preferred doctor and/or hospital
Able to avoid elective surgery wait lists at public hospitals
If you earn over $90,000 annually, getting private health cover will avoid you having to pay the Medicare levy surcharge of between 1-1.5%
May be eligible for a rebate. Dependent on your income and age, the Australian government may provide a rebate on your hospital cover expenses. If eligible, this rebate will be processed with your tax return or by way of a discounted premium
Provides peace of mind. In the unfortunate event that a medical incident occurs, you can be assured that you and your family are covered by private health insurance and will receive the best care possible without financial concerns.
The most obvious disadvantage of hospital cover is the cost. The cost of hospital cover is out of reach for many individuals and families who miss out on the benefits.
Hospital cover can be complicated and overwhelming. The excluded treatments and out of pockets costs can be frustrating.
The hidden restrictions and exclusions in the terms and conditions or PDS can be a hassle and leave customers blindsided.
If you need treatment for an illness or injury that your policy restricts or excludes completely, you may have to wait for 12 months until your new policy covers you.
Health insurance and hospital cover can prove a headache. This is especially the case when you find out that you’re not covered for something you thought you were. This can be draining when you now have to worry about the financial costs of treatments or services, in addition to your own health and wellbeing. To avoid this hassle, it’s best you read and understand your policy’s terms and conditions, as well as the PDS, back to front.
When choosing the right hospital cover for you, it is important you enquire with the insurer about any annual limits they may have hidden in their policy. These annual limits mean you can only claim up to a certain amount for each medical service or treatment before it resets after every 12 months.
When choosing a hospital cover policy, don’t get sucked into paying for unnecessary extras you are very unlikely to use. This is just wasted money that could go towards getting you health cover at a higher tier.
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