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Frequently Asked Questions


Click on any of the Frequently Asked Questions below to find out more, and be sure to visit the websites listed under Where else can I get information about private health insurance?

Who is PHIAC?

How does private health insurance work?

What does private health insurance cover?

Do I have to get private health insurance?

Which is the best private health insurance?

How do I choose a health insurance policy?

Will I still be covered by Medicare if I take out health insurance?

Do I have to pay the Medicare Levy Surcharge?

What is the 30% rebate and how does it work?

What is Lifetime Health Cover?

Why are there waiting periods - and how long are they?

Can I get insurance if I have a pre-existing ailment/s or illness?

What is a gap?

The cost of my health insurance is going up – what can I do?

Can I change my insurer?

What’s the difference between for profit and non-for-profit/mutual insurers?

What does community rating mean?

I’m an overseas student studying in Australia - do I have to get health insurance?

I’m an overseas visitor - do I have to get health insurance?

I have a problem with my private health insurer – who can help me?

How can I be sure my private health insurer will be able to pay if I make a claim?

Where can I find a list of private health insurers?

Need help understanding the jargon?

Where else can I get information about private health insurance?


Who is PHIAC?

Private health insurance is a fundamental element of the Australian health system. The Private Health Insurance Administration Council (PHIAC) is responsible for regulating the private health insurance industry in Australia. For information on PHIAC’s core functions and structure, visit the About Us section of the website.

In its day-to-day operations, PHIAC aims to achieve an appropriate balance between the following statutory objectives:
  • fostering an efficient and competitive health insurance industry
  • protecting the interests of consumers of private health insurance and
  • ensuring the prudential safety of individual private health insurers.
Reflecting its statutory objectives, PHIAC’s strategic vision is:
 
                         “Protecting consumers of private health insurance.
                           Ensuring a well-run and competitive industry”

PHIAC plays an important role in assisting the development of the industry and supporting consumers in obtaining or maintaining cover. PHIAC focuses on monitoring and regulating the industry, maintaining its prudential standing and increasing consumer participation in private health insurance. PHIAC protects consumers by providing information to inform them about the range of insurance products (see Insure? Not Sure?) and by ensuring that insurers are prudentially sound and therefore able to pay policy holder claims as they arise.

PHIAC’s consumer protection role is different to that of the Private Health Insurance Ombudsman (the PHIO), who protects the interests of people who are covered by private health insurance by investigating complaints and assisting in the resolution of complaints.
 
For information on the types of matters that the PHIO can deal with refer to the section: I have a problem with my private health insurer - who can help me?

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 How does private health insurance work?

Consumers can purchase private health insurance to cover all or some of the costs of health care as a private patient. There are two types of private health insurance cover available: hospital and general (also called ancillary or extras).

  • Hospital covers all or some of the costs of hospital treatment as a private patient including doctor’s charges and hospital accommodation. The extent of hospital insurance cover varies depending upon the policy. Private health insurers use the terms ‘Top, Medium, Basic and Public’ to describe the level of hospital cover a product provides.
     
  • General (also called ancillary or extras) cover helps with the cost of services such as physiotherapy, dental and optical treatment. The terms ‘Comprehensive, Medium and Basic’ are often used to describe the different tiers of general cover.
Some funds offer packaged products that combine both hospital and general cover.
 
Ambulance cover may be available separately, combined with some policies, or in some cases is covered by a state or territory government.
 
PHIAC’s publication Insure? Not Sure? provides information about the different types of private health insurance available to consumers and the types of questions you should consider asking an insurer before taking out, or changing your insurance cover.
 
Generally speaking, the more extensive the health cover, the greater the contribution rate (premium). For example, a basic policy may not cover major dental surgery, where a medium policy might.
 
Coverage and cost will vary between insurers, so be sure to thoroughly research your insurance options. A comparison tool is online at www.privatehealth.gov.au
 
Be sure to note what services are excluded from your chosen plan. You can review plan options by asking an insurer for a copy of the Standard Information Statement for the product/s you are considering purchasing.
 
A Standard Information Statement only gives a summary of the key product features. It allows you to see if your broad needs are covered and where products differ in both price and features. You will need to contact the private health insurer to get all the details about a particular product. SIS can also be downloaded at www.privatehealth.gov.au
 
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What does private health insurance cover?

Depending on what is included in the policy offered by a private health insurer, you may insure against some or all of the costs of health services not covered by Medicare, such as:

  • hospital expenses (theatre fees or accommodation) in either a public or private hospital
  • some or all of the medical costs Medicare does not cover
  • dental treatment
  • ambulance
  • chiropractic treatment
  • home nursing
  • podiatry
  • physiotherapy, occupational, speech and eye therapy
  • glasses and contact lenses
  • prostheses
  • other general services (also known as ancillary or extras).
Every year, your insurer will issue you with a detailed health insurance policy that sets out what health products and services you are entitled to claim. Be aware that you won’t always be covered for 100% of the costs incurred, even if you are insured. Always check the details with your insurer before any expensive services to avoid costly surprises.
 
Policies may set limits on the amount you can claim for a certain service – for example, up to $200 for optical services per year, which means if you spend $300 on optical services in one year, the additional $100 will not be reimbursed by your private health insurer. This is known as the gap - for more information please refer to the section: What is a gap?
 
The private health insurance consumer information website www.privatehealth.gov.au provides a comparison graph of what is covered by Medicare and private health insurance.

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Do I have to get private health insurance?

Health care can be expensive. As the basis of Australia's health care system, Medicare covers many health care costs. Private health insurance provides additional cover for services not covered by Medicare.

Private health insurers offer a range of insurance options – hospital, general (also called ancillary or extras), and a combination of the two. You need to decide which insurance option best suits your needs. You should consider your financial situation and your current and future health needs when making a decision about whether or not to purchase private health insurance.
 
People who cannot afford the premiums for private health insurance, or do not wish to take out private health insurance, continue to have the right to access the public hospital system through Medicare on the basis of clinical need. You may elect to be treated as a public patient in a hospital, even though you have private health insurance.
 
Private health insurance is optional - however if you don't purchase hospital cover by 1 July in the year following your 31st birthday, you will pay the Lifetime Health Cover loading on top of the premium of any hospital cover you later purchase.
 
See the section: What is Lifetime Health Cover? for more information about how much extra you will need to pay if you choose not to take out private health insurance once you turn 31.
 
If you do not have a complying hospital cover policy, you may also have to pay the Medicare Levy Surcharge, covered in the section: Do I have to pay the Medicare Levy surcharge? The Australian Tax Office has an online calculator to help you estimate how much additional tax you will pay if you do not take out an eligible private health insurance policy. Comparing this against the cost of a health insurance premium is one way to inform your decision about whether to take out private health insurance.

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Which is the best private health insurance?

There is no “best” insurance policy. The most appropriate policy for you will be the one that best matches the current needs of you and your family.

The private health insurance consumer information website www.privatehealth.gov.au, managed by the Private Health Insurance Ombudsman, is a free and independent source of information about private health insurance. This site includes a searchable database of all complying private health insurance policies available in Australia.
 
The section: How do I choose a health insurance policy? has tips and tools to help you make the best choice.
 
It is also a good idea to review your policy regularly.

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How do I choose a health insurance policy?

The private health insurance consumer information website www.privatehealth.gov.au, managed by the Private Health Insurance Ombudsman (the PHIO), is a free and independent source of information about private health insurance. This site includes a searchable database of all complying private health insurance policies available in Australia.
 
You can use the website to compare your current health insurance policy with other policies to check whether your policy still provides the most appropriate cover and the best value for you.
 
PHIAC’s publication Insure? Not Sure? also provides detailed information about the different types of private health insurance available in Australia.
 
The PHIO has a brochure called Choosing a Health Insurance Policy which discusses important questions to ask when investigating your insurance options. The PHIO also publishes a brochure called 10 Golden Rules of Private Health Insurance, which has tips to help you avoid common problems with private health insurance.
 
You can also compare Standard Information Statements, which are available for all private health insurance policies available in Australia. Insurers are required by law to provide these statements so you can review your existing policy or compare private health insurance products.
 
A Standard Information Statement only gives a summary of the key product features. It allows you to see if your broad needs are covered and where products differ in both price and features. You will need to contact the private health insurer to get all the details about a particular product.

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Will I still be covered by Medicare if I take out health insurance?

Every Australian has the right to access Medicare for medical treatment. This means that, if you choose, you may elect to be treated as a public patient in a hospital, even though you have private health insurance. The hospital cannot force you to use your private health insurance if you do not want to and must treat you as a public patient in a public hospital under Medicare at no charge.

People who cannot afford the premiums for private health insurance, or do not wish to take out private health insurance for any other reason, continue to have the right to access the public hospital system through Medicare on the basis of clinical need.

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Do I have to pay the Medicare Levy Surcharge?

The Medicare Levy Surcharge is levied on Australian taxpayers who do not have hospital cover and who earn above a certain income. The surcharge is calculated at the rate of 1% of taxable income. This is in addition to the Medicare Levy of 1.5%, which is paid by most Australian taxpayers.

To be exempt from the Surcharge, your hospital cover must be held with a registered private health insurer and cover some or all of the fees and charges for a stay in hospital. General cover (also called ancillary or extras) without hospital cover will not provide an exemption.

Please refer to the Department of Health and Ageing website for up-to-date information about the Medicare Levy Surcharge.

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What is the 30% rebate and how does it work?

The Commonwealth Government provides a 30% rebate on private health insurance cover. There are higher rebates for older people: 35% for people aged 65-69 years and 40% for people aged 70 years and over.

Anyone can claim the private health insurance rebate if they are eligible for Medicare and have a complying health insurance policy that provides hospital cover, general (ancillary or extras) cover, or both.
 
There are three options for receiving the rebate:
  • as a premium reduction through your private health insurer
  • as a tax rebate when lodging your annual taxation return (even if you do not have a tax liability) or
  • as a direct payment from your local Medicare Office.

More information about the 30% rebate is available from Medicare Australia, the Australian Taxation Office and from all registered private health insurers.

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What is Lifetime Health Cover?

The Lifetime Health Cover loading is an additional charge you may have to pay for hospital cover, depending on your age and how long you have had private health insurance.

To avoid paying this extra loading, you need to purchase hospital cover by 1 July in the year following your 31st birthday. If you purchase hospital cover after this date you may be required to pay a Lifetime Health Cover loading – 2% for each year you are over 30.

The Private Health Insurance Ombudsman has developed a Lifetime Health Cover Calculator which will help you to work out your Lifetime Health Cover loading.
 
Once you have paid a Lifetime Health Cover loading on your private hospital insurance for ten continuous years, the loading is removed as long as you retain your hospital cover. A gap of 12 months in coverage is permitted, provided you resume your cover, without affecting your Lifetime Health Cover status.

More detailed information about Lifetime Health Cover is available from the Department of Health and Ageing website.

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Why are there waiting periods - and how long are they?

You may have to serve a waiting period when you start a new private health insurance policy or increase your level of cover. A waiting period protects members of the insurer by ensuring that no new contributor makes a large claim shortly after joining and then drops their membership, which could result in increased premiums for all members.

You should not have to serve another waiting period if you change insurers but do not increase your level of cover, provided you have already served the waiting period with your previous insurer.
 
The Australian Government sets the maximum waiting periods that insurers can impose for hospital treatment:
  • 12 months for pre-existing conditions
  • 12 months for obstetrics (pregnancy)
  • two months for psychiatric care, rehabilitation or palliative care, even for a pre-existing condition and
  • two months in all other circumstances.
The waiting periods for general (ancillary or extras) cover are set by individual private health insurers.
 
When purchasing health insurance, make sure you are fully aware of any waiting period you may have to serve. There is usually no waiting period if you need hospital or medical treatment because of an accident that happens after you join the insurer.

It is important to check with your private health insurer about waiting periods prior to your admission to hospital. Your private health insurer will need at least a week to advise you about whether the pre-existing condition 12-month waiting period applies.

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Can I get insurance if I have a pre-existing ailment/s or illness?


Even if you are already ill, private health insurers must allow you to purchase any type of cover. If an insurer refuses you membership, this may be an offence under the
Private Health Insurance Act 2007. This is because private health insurance is ‘community rated’, unlike products such as life insurance, which are ‘risk rated’.

A gap is the amount you pay either for medical or hospital charges, over and above what you get back from Medicare and your private health insurer. Some private health insurers have gap cover arrangements to insure against some or all additional payments.

 

For more information on community rating, please refer to the section: What does community rating mean?

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What is a gap?

Before you go to hospital, you should ask your doctor for an estimate of their costs, if there will other doctors involved in your care (e.g. anesthetist, assistant surgeon) and what their charges will be. You should also check with your private health insurer to find out exactly how much is covered by your policy.

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The cost of my health insurance is going up – what can I do?
The cost of private health insurance is regulated and a private health insurer that proposes to change the premiums charged for a complying health insurance product must apply to the Minister for Health and Ageing for approval of the change, at least 60 days before the day on which the insurer proposes the change to take effect.
 
Rate increases generally happen in April of each year.
 
If you are unhappy with the cost of your policy, you can switch insurer or policy at any time. The consumer information website www.privatehealth.gov.au is a free and independent source of information about all aspects of private health insurance, including a database of all policies available in Australia. If you do change, any waiting periods you have already served will also be transferred.
 
You can use the consumer information website www.privatehealth.gov.au to compare your current health insurance policy with other policies available for purchase, or to check whether your policy still provides the most appropriate cover and the best value for you. It is advisable to do this every few years, and when your personal circumstances charge.

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Can I change my insurer?

Yes, you can change your private health insurer at any time (sometimes referred to as ‘portability’). The consumer information website www.privatehealth.gov.au has a consumer guide on switching funds. Any waiting periods you have already served will also be transferred, however, if you change to a higher level of cover you may have to serve a waiting period before you can claim benefits at a higher level.
 
Benefits paid by the previous insurer may be taken into account by your new insurer when it determines your annual benefit limits.
 
Transferring between insurers will not affect your Lifetime Health Cover entitlements, provided that you maintain hospital cover.
 
Some private health insurers place limitations on who can be a member (known as restricted membership organisations) - for example you may need to work in a certain occupational category to purchase an insurance policy. This is at the discretion of the insurer offering the insurance product.

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What’s the difference between for profit and non-for-profit/mutual insurers?

Historically, most private health insurers were not-for-profit, mutual societies. The industry has shifted rapidly since 2008 and is now predominantly for-profit. The main difference is how any assets may be utilised.

The Private Health Insurance Act 2007 (the Act) places strict limitations on how not-for-profit insurers can apply or deal with the assets of a health benefits fund.

In contrast, private health insurers that operate on a for-profit basis are free to allocate their profits where they choose – for example making payments to shareholders, provided that in so doing, they continue to comply with the prudential requirements of the Act.

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What does community rating mean?


It is a fundamental principle of private health insurance that everyone is able to access affordable cover regardless of their health status or other factors detailed in the private health insurance legislation.

To ensure that everybody who chooses to has access to health insurance, the principle of community rating prevents private health insurers from discriminating between people on the basis of their health, their age (other than age at entry for Lifetime Health Cover), gender, race, sexual orientation, state of health, religion, or the size of their family.

Other forms of insurance, such as life, or car insurance, price products using the principle of ‘risk rating’. This means that a person’s premium may be higher or lower than another policy holder, based on the likelihood that they will make a claim.

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I’m an overseas student studying in Australia - do I have to get health insurance?

It is a condition of most student visas that students intending to study in Australia must have Overseas Student Health Cover (OSHC) insurance for the duration of their visa.

If a student does not take out OSHC before arriving in Australia, he/she will not be covered for any medical treatment they might require. More information about OSHC can be found on the Department of Health website.
 
Norwegian students do not need to take out OSHC, as health insurance for all Norwegian students is provided by the Norwegian Government.
 
Many Swedish students have health insurance provided through CSN International, the Swedish National Board of Student Aid. These students will not have to take out OSHC before arriving in Australia. If a Swedish student is not covered by CSN International, they must take out OSHC.

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I’m an overseas visitor - do I have to get health insurance?


Overseas visitors on temporary visas are not eligible for Medicare benefits unless they are from a country with which Australia has a 'Reciprocal Health Care Agreement'. Australia currently has agreements with the United Kingdom, Malta, Finland, Sweden, Italy, New Zealand, the Netherlands, Ireland and Belgium.
 
If you are visiting Australia from these countries and you are not on a student visa, you are generally covered for medically necessary treatment in a public hospital. If you are unsure of your Medicare eligibility status, check the Medicare website or contact them if necessary.

A number of private health insurers and general insurers provide health cover for overseas visitors. Benefits available, membership costs and eligibility can vary between insurers.

See Overseas Visitors Health Cover for more detailed information.

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 I have a problem with my private health insurer – who can help me?

If you have not been able to resolve a dispute directly with your insurer, contact the Private Health Insurance Ombudsman (PHIO) on 1800 640 695.
 
The PHIO protects the interests of people who are covered by private health insurance. Generally, anyone can make a complaint, as long the complaint is relevant to private health insurance. The PHIO will look into complaints that concern private health insurance consumers, but the office may not investigate complaints of a purely commercial nature that do not have a significant impact on the rights of consumers.
 
Complaints need to be about private health insurance or a related matter. They can be about a private health insurer, a broker, a hospital, a medical practitioner, a dentist or other practitioner, as long as the complaint relates to private health insurance. The PHIO cannot deal with complaints about Medicare - these should be directed to the Commonwealth Ombudsman.
 
Complaints about the quality of service or treatment provided by a health professional or a hospital should be directed to the health care complaints body for your state or territory.
 
Information for whistleblowers is found here on PHIAC's website

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How can I be sure my private health insurer will be able to pay if I make a claim?

The Private Health Insurance Administration Council (PHIAC) closely monitors and analyses the financial operations and affairs of all registered private health insurers in Australia. PHIAC’s most important role is ensuring the prudential safety of individual private health insurers – in other words, making sure your insurer is able to fulfill insurance claims made by its customers.

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Where can I find a list of private health insurers?

The Private Health Insurance Administration Council maintains a list of all registered private health insurers and their contact details.

You can compare policies from all the insurers on the independent consumer information website www.privatehealth.gov.au.

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Need help understanding the jargon?

Visit the private health website glossary to find definitions of any terms you don’t fully understand.

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Where else can I get information about private health insurance?

A number of websites provide useful information for consumers about private health insurance.

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If you can’t find the answer to your question, or have a suggestion for a new question for this website, or would like to provide any other feedback, please email us: feedback@phiac.gov.au

Last updated October 2010. 

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