Health insurance for mental health

If you need to go to hospital for a mental illness, private hospital insurance can pay a benefit towards your treatment as a private patient after you have an appropriate level of cover and have served a two month waiting period. In-hospital psychiatric services must be included as a restriction* on Basic, Bronze and Silver levels of cover, meaning you’re only covered as a private inpatient in a public hospital.

If you want unrestricted** mental health cover, you can compare health insurance policies to find one that includes the hospital psychiatric services clinical category on an unrestricted basis. Alternatively, all Gold tiered polices come with unrestricted cover for all categories, however these polices will typically come with a higher premium.

Typically, when you upgrade hospital cover, you need to serve a waiting period before accessing new or higher benefits. Fortunately, when it comes to psychiatric care, this isn’t always the case. If you’re currently on a hospital policy that offers restricted cover for in-hospital psychiatry, you may be able to use the mental health waiver to upgrade to a policy with unrestricted cover without serving the waiting period. To be eligible, you must have completed the two-month waiting period for restricted in hospital-psychiatric treatment on your prior policy.

This benefit is available to everyone in Australia who qualifies for Medicare and can only be claimed once per lifetime. However, you don’t have to use the waiver if don’t need it, meaning you can upgrade your cover, serve the waiting period, and save this benefit in case you need it in the future.

If you don’t have a mental health treatment plan or have used all of your Medicare subsidised out-of-hospital mental health appointments, an extras cover policy could cover you for some or all of your psychologist costs.

Depending on your benefit type, annual limits and what your healthcare provider charges, you may still have some out-of-pocket costs.

Besides psychologists, there are a few other mental health professionals whose consultations can be covered by extras. These include:³

• Mental health social workers specialise in the diagnosis and treatment of mental health issues relating to social factors like housing, employment and interpersonal relationships.
• Counsellors specialise in talk-based therapy to assist with life challenges, stress management and teach problem-solving skills.
• Occupational therapists specialise in the diagnosis and treatment of mental health issues relating to things like employment and help develop coping strategies to encourage independence.
• Hypnotherapists specialise in using hypnotherapy to put you in a relaxed and suggestable state of mind to help with fears and phobias, insomnia, addiction and more.

When you see a medical specialist like a psychiatrist out of hospital, private health insurance won’t cover your costs. However, Medicare will pay 80% of the Medicare Benefits Schedule (MBS) fee for your appointment.

If your psychiatrist chooses to charge 80% of the MBS fee, this is called bulk billing, and won’t need to pay anything out of pocket. However, if they charge above this amount, you will be responsible for paying the difference. Below are some of the MBS items for psychiatry, and the average amounts paid by Medicare and patients.

If you need mental health care in a public hospital, the full cost of your hospital stay and treatment will be covered by Medicare. However, before you can be admitted to a public psychiatric hospital, you’ll need to wait on the public waiting list for a spot to be available.

Public hospital waiting lists are triaged and admittance is usually based on the severity of the condition and threat the patient poses to themselves or others. While most patients are still seen within the recommended timeframe, this is not always the case.⁴

With private patient psychiatric hospitals, waiting times are typically shorter, so you can get treated faster, although this will come at a higher cost.

Through the Australian Government’s Better Access initiative, Medicare can pay towards a set number of appointments with a mental health professional per calendar year. To get access to this benefit, you need to be diagnosed with a mental illness and given a mental health treatment plan from your GP or psychiatrist, or a paediatrician if the treatment is for a child.

Once you have a mental health plan, you’re entitled to 10 individual and 10 group sessions with a mental health professional per calendar year. At first, your doctor will refer you for up to six sessions, after which you’ll check back in with your doctor to see how you’re going. Depending on how those initial six sessions went, your doctor can then refer you for the additional sessions or to a different mental health service.

When you’re treated under the Better Access scheme, Medicare will pay a percentage of the MBS fee for your treatment. If your mental health professional bulk bills, they will only charge the percentage that Medicare pays, so you don’t pay a thing. However, many doctors charge above this amount, so you may need to pay the difference out of pocket.