Private health insurance waiting periods

Private health insurance waiting periods make pricing fair for existing customers. Without waiting periods, people could sign up for cover, immediately claim expensive hospital treatment (like joint replacement surgery) and then cancel their policy before paying anything substantial.

This would effectively allow anyone to access significantly discounted private health care and would cause insurers to charge higher premiums to compensate, impacting customers with increased costs.

You can use your health insurance straight away if you have transferred to a new hospital or extras policy within the same level of coverage as your previous one, provided you’ve already served the applicable waiting periods for the treatment you are looking to claim for.

If you’re adding to or upgrading your existing hospital or extras cover, you will still be subject to waiting periods for those additional services you’re gaining from the upgrade. However, you will typically still be able to claim your benefits on a lower level of cover. For example, suppose you have an annual limit of $500 to claim on dental services and upgrade to a policy with a $750 limit. In that case, you could claim up to $500 on dental services (provided you haven’t claimed the annual limit with your previous fund) while you serve the waiting period to access the additional $250.

When you switch health insurance policies, your health fund will typically carry across any waiting periods you’ve already completed for a comparable or lower level of cover. However, there are a few exceptions to this that you’ll need to be aware of, such as:

• Not completing your original waiting period. For example, if you have served 6 months for a benefit requiring a 12-month wait, you will need to complete the remaining 6 months before you can claim on an equal level of cover.
• New or higher benefits. If your new policy includes a feature you weren’t previously covered for (e.g. orthodontics), you will still need to complete the waiting period before claiming those benefits under a higher level of cover.
• Gaps in cover. Depending on the fund you’re switching to, you may have to re-serve your waiting periods if you go too long without cover between policies.

The Australian Government sets the maximum waiting periods for hospital policies. Most health funds stick to these caps, although they may offer lower waiting periods for promotional purposes (though these waivers are typically applied to extras policies rather than hospital cover).

While private health insurance waiting periods can be waived in some circumstances on extras products, most health insurance policies offered in Australia will incur some sort of waiting period as a general rule. These times may vary between providers or the services you want covered.

There’s a 12-month waiting period for hospital cover relating to any pre-existing medical conditions you have (except for psychiatric care, rehabilitation and palliative care). After that, you can claim for any treatments listed in your policy brochure provided the procedure is medically necessary, listed on the Medicare Benefits Schedule (MBS) and you’re admitted as an inpatient. Pre-existing conditions aren’t taken into account when claiming on your extras cover.

Waiting periods for hospital cover vary between clinical categories but are no longer than 12 months. The Private Health Insurance Ombudsman outlines the maximum waiting periods you must serve before you can claim on certain hospital benefits.¹ They are:

• 12 months for treatment relating to a pre-existing condition. This is an ailment, illness or condition you showed signs or symptoms of in the 6 months before taking out a hospital policy (excluding cover for palliative care, rehabilitation and psychiatric care) or upgrading to a higher level of cover. This will be assessed by a medical practitioner appointed by the health insurer.
• 12 months for pregnancy and birth-related services (obstetrics). This means you’ll need to consider health insurance for you and your unborn child before you fall pregnant.
• 2 months for other services that require hospitalisation (and aren’t pre-existing conditions or subject to other waiting times).

You may also be able to get an exemption from your waiting periods for unrestricted psychiatric care when you upgrade your hospital insurance policy from a level of cover where you have finished a two month waiting period for limited psychiatric care. This is a once in a lifetime exemption.

In some circumstances, health funds may have shorter or no waiting periods for cover for accidents. Other than that, funds generally won’t waive the waiting periods for hospital cover.

If there’s a certain feature of your health insurance policy you wish to claim on sooner rather than later, ask about the waiting periods that apply before you join. Or compare health insurance policies to review the different waiting periods that apply for different policies.

Always check your policy document for applicable waiting periods.

You need to take out pregnancy cover at least 12 months before the expected due date to be covered. If you deliver your baby early, prior to serving your waiting period, your health fund will not pay a benefit towards your private hospital inpatient costs.

Once you’ve served your waiting period, you’ll be covered up to the MBS fee for giving birth in a private hospital. You’ll be able to recover in your own private room (subject to availability) and choose your obstetrician who will be there with you through the birth (if available).

The waiting periods for extras cover (also known as general treatment or ancillary care) can be as little as zero to two months for cheaper services (e.g. general dental and physiotherapy) or up to 36 months for more expensive services (e.g. hearing aids or dentures).

The Private Health Insurance Ombudsman outlines some typical waiting periods for general treatment, as shown in the table below.¹

Insurers often hold promotions where they waive some extras waiting periods on combined extras and hospital policies to encourage new members to join private health insurance.

However, it’s uncommon for insurers to waive 12-month waiting periods. For example, you may not need to serve waiting periods for general or preventative services like routine dental check-ups. Still, you will need to wait before claiming on major dental treatment, like root canals or denture care.