Hospital cover is a key component of private health insurance, as it provides financial protection for a range of medical services and treatments. It's no secret that life's curveballs come when you least expect them, so being prepared for the cost of hospital stays, surgeries, and specialist care can provide the ultimate peace of mind as well as access to better healthcare options.
In this guide, we'll clear up the common misconceptions about hospital cover, explore the benefits, and share practical tips for conducting your own hospital insurance comparison. Overall, you'll be educated on how it can safeguard not only your health, but your finances.
What is hospital cover?
In a nutshell, private health insurance hospital cover is designed to help you manage the costs of hospital care. It provides financial support for various treatments and services you may need during a visit to the hospital - whether it's planned or an emergency, and whether it's same-day care or an overnight stay. Included are the costs of surgeries, accommodation, and specialist fees, as listed in the Medicare Benefit Schedule (MBS).
The importance of hospital cover lies in its ability to reduce your out-of-pocket expenses. When you require medical treatment, the Australian Government covers 75% of the MBS fee you are charged, and your hospital insurance takes care of the remaining 25%. In addition, many insurers offer gap cover arrangements to assist with any costs over and above the MBS fee.
The types of hospital cover
There's nothing quite as valuable as your health and well-being, so making the most informed decision about your health insurance is key. Here's a general breakdown of what you can expect from basic, medium, and top-tier hospital cover plans.
Basic cover
Basic cover is all about essential protection. It covers things like emergency ambulances, hospital accommodation, and select treatments like dental surgery and joint reconstructions. This is a no-frills, cost-effective option for those seeking minimal yet crucial coverage.
Medium cover
Offering a broader range of services beyond the basics, medium cover levels typically include more comprehensive treatments like heart and vascular services and major eye surgery. This level is all about balancing cost and coverage.
Top-tier cover
This level is for the most extensive protection for whatever life throws your way, with maximum financial protection and flexibility. Top-tier coverage generally includes everything in the lower levels but with the added benefits of cover for pregnancy and birth and weight loss surgery.
Busting common myths about hospital cover
There seem to be a number of misconceptions about hospital insurance that circulate and feed misinformation to people all around Australia. Stay tuned as we dispel some of them.
Myth #1: You don't need hospital cover because you're covered by Medicare
While we're very lucky to live in a country with a healthcare system like Medicare, it doesn't cover everything. Hospital cover fills the gap, offering a choice of medical professionals, access to private hospitals, and shorter wait times for elective surgeries.
Myth #2: You're too young and healthy to need hospital cover
The reality is that unexpected health issues can arise at any time, at any age. The purpose of health cover is to provide not only financial protection but peace of mind when it comes to surprise medical expenses.
Myth #3: Private health insurance is too expensive
Plenty of affordable health insurance policies exist, particularly if you're young and healthy. In addition, government rebates and tax incentives can also reduce costs. Overall, private health insurance is probably far more accessible than you think.
Myth #4: Medicare always covers emergency ambulance transport
Something you may not realise is that ambulance costs are billed differently across Australian states and territories. Without the right private health cover to save you from unexpected out-of-pocket expenses, you could find yourself with a substantial bill.
Myth #5: Private health insurance is a set-and-forget situation
As you age, your lifestyle and family dynamic evolve, and so too does your medical care. Reviewing your policy regularly ensures it meets your changing needs and maximises your benefits.
Myth #6: Cheaper health insurance always means a better deal
Lower premiums may sound more enticing, but they often come with fewer benefits. It's important to balance cost with coverage according to your stage of life to ensure you have adequate protection with the inclusions that matter to you.
Myth #7: Choosing the right private health insurance policy is just too confusing
With the right guidance and resources, selecting a suitable policy can be far more straightforward than you think. When it comes to hospital insurance comparisons, always do your research and make informed decisions before making a comittment.
Real-life benefits of private health insurance hospital cover
Here are some of the real-life stories, told by people who have experienced HIF hospital cover first-hand:
I have been a member of HIF since I was 21 years old. I have found their customer service team excellent and helpful. I have both hospital and extras cover and have never had an issue with claims. My cover is affordable and suits my lifestyle/health needs. I enjoy getting the member newsletter. I love that HIF have always treated me as an individual and provide personalised service! - Madeline
I've held private health insurance for 25+ years. Mid last year, I fell on hard times so I suspended my cover for six weeks. When I recommenced I was on a new policy and had to wait for pre-existing conditions to be served, which I was completely unaware of. My hospital procedure was scheduled for the next day and was refused based on this information. I wish to take this moment to thank HIF for going beyond the extra mile to help me out. We were able to come to an arrangement and I believe HIF came up with an agreeable solution that looks after their and my requirements. Without a doubt HIF is the best health insurance company and they really do care - that is what sets them apart from the rest. Thank you HIF from the bottom of my heart. I appreciate everything you did to help me. - Tammy
I've been with HIF for many years now and while the premium has just gone up slightly it is still more competitive than ever other company out there! Plus the rebates have been fantastic for dentistry etc and last year when I had a baby everything in hospital was covered and I got a private room for my hospital stay. Very happy and will remain a loyal customer. - Nikki
Comparing hospital cover plans accurately
Here are our handy tips and tricks for making informed decisions about comparing hospital cover plans for your lifestyle:
- Identify your health requirements and priorities considering your age, medical history, and potential future health needs
- Review the specific treatments and services included in each plan, with a focus on essential services like surgeries, hospital stays, and specialist care
- Assess any additional inclusions like dental, optical, and physiotherapy to see if they align with your current or future needs
- Compare all financial implications like the premiums, deductibles, and any out-of-pocket expenses to ensure good value without unexpected high costs
- Check if your preferred hospitals and doctors are included in the insurer’s network for extra convenience and potentially less expenses
- Understand the waiting periods for specific treatments and services, keeping in mind that plans with shorter waiting periods are typically more advantageous
- Use an online hospital insurance comparison tool to easily compare different plans side by side
The tax benefits of having hospital cover in Australia
If the thought of skipping public hospital waiting lists, choosing your preferred hospital and treating doctor, and enjoying private room accommodation wasn't enough, let's talk about the tax benefits.
When you take out private health insurance, you can enjoy:
A Medicare Levy Surcharge (MLS) Exemption
Hospital cover exempts you from the Medicare Levy Surcharge, which is a tax for higher-income earners who aren't covered by private health insurance.
A private health insurance rebate
You'll be able to claim a rebate on the private health insurance premiums you pay, which reduced the overall cost. This income-tested rebate provides greater savings for eligible policyholders.
What is Lifetime Health Cover (LHC) Loading?
Lifetime Health Cover (LHC) Loading is a Government initiative designed to encourage people to take out private hospital cover earlier in life. As a result, if you’re over 31 when you take out your first policy, a loading of 2% will be added to your premium for every year you are over 30, up to a maximum of 70%. LHC is applied for ten continuous years of maintaining hospital cover.
What you need to know about waiting periods
A waiting period is the time you need to hold your policy before you can make a claim. All health insurers in Australia have waiting periods to protect themselves and their members from people joining a fund, making large claims, and then cancelling their policy.
The length of the waiting period can vary depending on fund, treatment, or service, but the maximum waiting periods as pre-determined by the Government, are:
- 12 months for pregnancy and birth-related services
- 12 months for pre-existing conditions and ailments
- 2 months for psychiatric, rehabilitative, and palliative care (pre-existing or otherwise)
- 2 months for general hospitalisation
Making the right choice for your health
To select the right hospital cover plan:
- Identify your current health needs
- Look for coverage of essential services
- Consider any extra benefits you might need
- Compare costs, including premiums and additional expenses
- Check if your preferred hospitals and doctors are covered
- Review waiting periods for different treatments
- Compare the tiers and choose the best one for your lifestyle
At HIF, we've been proudly making our members happy since 1954. But don't just take our word for it; read some of the testimonials from happy policyholders.
Final thoughts on private health insurance hospital cover
Understanding the ins and outs of hospital cover is essential for making smart choices about your health and wellbeing. It helps you to avoid nasty surprises with medical bills and ensures you're covered for the treatments you need.
If you're ready to discover what HIF can do for you in securing your health and financial future, review our hospital cover information to find the perfect plan. If you have questions, reach out to the friendly team for answers. And, if you're ready to take the next step, get a quote today.
Please note: Kirsty's blog is general advice only. For further information on this topic please consult your healthcare professional