Health insurance for mental health
For immediate mental health support, Lifeline (13 11 14), Beyond Blue (1300 22 4636) and the Kids Helpline (1800 55 1800) offer free mental health services online or over the phone 24 hours a day, 7 days a week.
What’s considered a mental illness?
Also known as a mental health condition or disorder, a mental illness is a health issue that affects the way you think, feel or behave.1 Mental illnesses vary in severity, but most can be treated or managed with the help of a mental health professional. Some common types of mental illness include:
- Depression
- Anxiety
- Eating disorders
- Mood and personality disorders.
It’s estimated that around 1 in 5 Australians will experience a mental illness at some point. If you think you’re showing signs or symptoms of a mental health issue, you should seek help from your doctor as soon as possible, as early detection can make a big difference.
Psychology vs psychiatry
A range of mental health support services are available, but the two you’ll commonly hear about are psychologists and psychiatrists. There is crossover between these services, but the core difference is a psychiatrist has trained as a medical doctor and can prescribe medication and admit you to hospital.2 A psychologist is not a medical doctor and cannot do this.
Psychiatrists are typically used for more severe conditions that require medication, although they can also make use of counselling and psychotherapy. On the other hand, psychologists are experts in human behaviour who can treat mental illnesses with psychotherapy, and also help you with life challenges like grief, domestic violence, financial stress and more.
To get psychiatric care, you’ll most likely need a referral from a GP or another medical professional. For psychology services a referral isn’t necessary, although your doctor may be able to recommend a psychologist that specialises in the mental health issues you are experiencing or give you a mental health treatment plan.
Private health insurance for mental health care
Hospital cover
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.
Mental health waiver for waiting periods
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.
Extras cover
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.
Cost of private psychiatric services
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.
| MBS item | Average total cost | Average Medicare rebate (80% of MBS fee) | Average patient costs |
|---|---|---|---|
| First appointment for new patients | $480 | $237 | $243 |
| Appointment to develop a 12-month treatment plan | $610 | $413 | $197 |
| Appointment to review and update a treatment plan | $400 | $258 | $142 |
| Standard appointment between 45-75 minutes | $350 | $168 | $182 |
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Source: Medical cost finder, Department of Health and Aged Care. July 2024 |
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What mental health services does Medicare cover?
In hospital
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.
Out of hospital
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.
Meet our health insurance expert, Steven Spicer
As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.
Want to know more about health insurance?
1 Private Health Insurance Ombudsman, Private cover for psychiatric services, rehabilitation and psychology. Accessed July 2024.
2 Health direct, Psychiatrists and psychologists. Accessed July 2024.
3 Health direct, Mental health professionals. Accessed July 2024.
4 AIHW, Mental health services provided in emergency departments. Accessed July 2024.
* Restricted cover: Refers to being covered only as a private patient in a public hospital. If you go into a private hospital as a private patient, your health fund will not pay anything towards the theatre fees and only a small amount towards your accommodation fee. This means you will face considerable out-of-pocket costs.
** Unrestricted cover: Refers to being covered for your theatre and accommodation fees as a private patient in a private hospital or a private day hospital facility, as well as being covered up to the MBS for clinical categories included as unrestricted on your policy. Having this level of cover allows you to choose the available doctor who treats you, provided your doctor has an arrangement with the hospital you want to be treated at, and the hospital you have chosen has beds available.