HealthdealHealth Insurance FAQ: Private Health Insurance Explained | Health Deal

Private Health Insurance FAQ

Please read our private health insurance FAQ to view the most frequently asked questions (and answers) about health insurance, whilst providing further information about our service and what you need to know when you are comparing health insurance options.

Health Deal is a health insurance comparison service which allows customers to Compare Private Health Insurance. Our consultants will help you compare your current health insurance policy against our panel of health funds, and will try to find you a more suitable policy than the one you’re currently on. If you don’t have a policy, we will help you find one that matches your needs and budget.

Health Deal is a member of PHIIA (Private Health Insurance Intermediaries Association) and a proud signatory of the PHIIA Code of Conduct. Furthermore, unlike some other health insurance comparators, we have a dedicated team that listen to 100% of sales calls, to make sure you’ve been given the correct advice when you switch. This has resulted in Health Deal having an exceptionally low complaint percentage and an above industry standard customer satisfaction score from customers surveyed by their new health fund. Our service is completely free, and if we can’t find you a better policy, we’ll simply tell you to stay put. Find out how we deliver an outstanding customer experience by comparing now.

The government has a series of incentives to take out private health insurance such as the Private Health Insurance Rebate, Medicare Levy Surcharge and Lifetime Health Cover Loading. The most common reason people take out private health insurance, however, is peace of mind. Our public system is world-class, but unfortunately the wait times for some procedures can be lengthy. Having private health insurance not only means that you can avoid the public waiting lists for surgeries, but you also have the added benefit of being able to choose your own doctor and hospital, something that isn’t available to you in the public system.

Yes, we will show no bias to one fund over another from our panel. Health Deal is a proud signatory of the PHIIA code of conduct and as part of our obligations under the code, we do not allow our consultants to know what commissions are paid by each of our health fund partners. This means that the consultant you are dealing with will not be incentivised to choose one health fund over another from our panel. Furthermore, if you are best off staying where you are, our consultants will tell you.

Absolutely not. Health Deal simply would not exist if people had to re-serve waiting periods on their hospital cover. Once you have served a given waiting period with a health fund, you will not need to serve this waiting period again if you switch health funds. This even applies to pre-existing conditions. You will only serve waiting periods on procedures which you are upgrading, or if you are new to hospital cover. This is enshrined under federal law in the Private Health Insurance Act 2007.

Yes you will. Waiting periods are in place so health funds can protect themselves against someone joining a health fund, claiming, and then cancelling their policy. If everyone did that, health funds would go out of business. The good news is though, health fund waiting periods for hospital cover are capped. The maximum waiting periods that can be imposed on hospital procedures are as follows:

  • 12 months for pre-existing conditions
  • 12 months for pregnancy and birth related services
  • 2 months for rehabilitation or palliative care (even for a pre-existing conditions)
  • 2 months in all other circumstances

The waiting periods for extras are set by individual health funds, and range from 2 months to three years.

Anyone with a pre-existing condition is protected by the principle of community rating, which means that health funds legally cannot discriminate against you for having a pre-existing condition, or your age or claims history for that matter. If you are already covered for your pre-existing condition with your current policy, then you’ll be covered from day 1 when you switch. If you are new to private health insurance, or you are upgrading your cover, you will need to serve a 12 month waiting period before you can start claiming for a procedure that relates to a pre-existing condition.

Yes you will receive a health insurance refund when you switch. This is because you must always pay for your policy in advance, meaning that when you switch you’ll have pre-paid for cover with your existing health fund. You will receive a pro-rata refund from your old health fund for any days which you have already paid. It normally takes around two weeks from your policy start date for your old health fund to refund you any overpaid premiums. If you are concerned that you will be billed twice, you can ring your bank to block any direct debits that are in place with the old health fund.

The health insurance paperwork will be facilitated by us to make the process as easy as possible for you. Your new health fund will contact your previous health fund and ask for a clearance certificate; this will document your claims history and the waiting periods you have already served. Depending on the fund, the only thing you may need to do is fill out and send back a government rebate form to your new health fund, if you wish to claim it. However, you are generally able to carry out this process online or over the phone with your new fund.

You can make a health insurance claim straight away with your new fund, if you’ve already served your waiting periods with your current health fund. Just be mindful that for around the first two weeks, you may not be able to claim using HICAPS. Your old health fund is required to send your transfer certificate to your new health fund, and until this occurred, the new health fund may not be aware that you have served waiting periods, and you may have to pay for a service in full. So if you need to claim on extras services within the first two weeks, all you need to do is pay for the service up front, keep the receipt and then claim it back from your new health fund once they have received your transfer certificate.

Each year on 1 April there is a private health insurance price rise, when health funds lift premiums. You’ll be sent a letter or an email informing you of what your new premium will be. You can beat the rate rise each year by paying for your health insurance yearly in March, thus locking in the previous year’s premium.

Depending on income, most Australians who take out a private health insurance policy are eligible to receive the Australian Government Private Health Insurance Rebate to help cover some of the cost of their premiums. The rebate applies to hospital, general treatment and ambulance policies. The table below details the different rebate amounts and Medicare Levy Surcharge levels.

Rebate

Singles

$90,000 or under

$90,000-105,000

$105,001-140,000

$140,001 and above

Families

$180,000 or under

$180,001-210,000

$210,001-280,000

$280,001 and above

 

Base Tier

Tier 1

Tier 2

Tier 3

Age < 65

25.053%

16.706%

8.352%

0%

Age 65-69

29.236%

20.883%

12.529%

0%

Age 70+

33.413%

25.059%

16.706%

0%

If you do not have a private hospital cover after July 1 following your 31st birthday, then your health insurance premium (hospital only) will increase by 2% for every year you do not have cover when you take it out for the first time. For example, if Felix took out hospital cover at age 40 then he would pay 20% (10 x 2%) more than someone who first took out hospital cover at age 30. If Felix waits until he is 50 to take out hospital cover, he would pay 40% (20 x 2%) more. Once you have a loading percentage attached to your policy, it will stay with you until you have served 10 years of continuous cover, at which point the loading will be reduced to 0% again. This is to incentivise Australians to take out private hospital cover much earlier on in life, which helps broaden the health insurance risk pool and keeps health insurance premiums lower for all. It is important to note that taking out an extras policy only will not mean you are exempt from the MLS. You must take out hospital cover to be exempt.

The Medicare Levy Surcharge is an extra tax of between 1% – 1.5% of your income you will have to pay if you earn above a certain threshold and you do not health private hospital cover. The reason behind this is to incentivise people who can afford private health cover to take it out, helping alleviate some of the strain out of the public system. The Medicare Levy Surcharge is not to be confused with the Medicare Levy, which is a separate 2% tax which most Australians pay to help fund Medicare.

Policy Type

Policy type

Standard

Tier 1

Tier 2

Tier 3

Singles

$90,000

$90,001-105,000

$105,001-140,000

$140,001

Families

$180,000

$180,001-210,000

$210,001-280,000

$280,001

MLS Rate

0%

1%

1.25%

1.5%

Health Deal receives a commission from the health fund you decide to switch to. This will not affect the price you pay. Health Deal is completely free to the customer, and you’ll be charged the same premium amount whether you decide to go through us, or through the health fund directly. This is based on the concept of ‘community rating’ and is enforced by Australian law under the Private Health Insurance Act 2007.