Private health insurance

In Australia, the public health system, Medicare, covers most Australian residents for health care. However, Medicare does not cover everything, and Australians can choose to take out private health insurance for access to increased cover for health care services. 

Most dental care in Australia is provided in private dental clinics. Private health insurance can help to pay for the costs of dental care, which is not routinely covered by Medicare. Only certain circumstances are covered by Medicare, such as the Cleft Lip and Palate Scheme for Australians born with a cleft lip and/or palate. 

Types of private health insurance cover

Hospital

This covers you for some or all of the extra costs of being a private patient in a public or private hospital. Medicare generally covers you for 75% of the Medicare Benefits Schedule (MBS) fee while private health insurance funds cover the remaining 25%. However, doctors may charge more than the standard MBS fee, meaning there is a "gap" between what Medicare and your fund will cover. Some funds offer "gap cover" but generally any amount beyond the MBS fee will have to be paid by you. In addition to the hospital charges, you may also have to pay for the cost of hospital theatre fees, intensive care, drugs and pharmaceuticals to name a few.

Extras cover

This covers you for treatment by what are known as "ancillary health service providers" such as dentists and dental specialists, chiropractors, physiotherapists, and optometrists. Policies vary widely between the different health funds. Treatment that is be covered by one private health insurer may not be covered by another. As well, the rebates, which is the amount you receive back from your private health insurer when you make a claim for a service, will be different between the different insurers. There are also limits on the amount you can claim back each year.

Ambulance

Medicare does not cover you for ambulance services so you either need to have it included as part of your hospital or general treatment policy, or you can take out a separate ambulance-only policy. The type of cover offered by health funds varies depending on the state in which you live.

Choosing the right policy

There are a numerous private health insurers and types of policies available. As well, you can take out hospital or extras cover only, and couples do not have to have the same policies. All these factors can make comparing private health insurance policies tricky.
There are some factors to consider when deciding on what type of cover is right for you.

Extras cover

Extras cover can include cover for dental treatment as well as massage, chiropractic and optical services. If you do not frequently use these services, extras cover may not offer you value for money. Even the one time head of the government organisation which oversees private health insurance in Australia expressed doubts about its value, and pointed out that you would be better off putting money aside for these services should you eventually need them.

Rebates

The rebate is the amount of money you receive back from your private health insurer when you make a claim for a service. Some companies may refer to rebates as benefits. 
On average, rebates are about 50% of the cost of dental treatment. Not-for-profit health funds or restricted health funds may return rebates up to 75%.
The rebate amount is set by your private health insurer and not by your dentist or other health care professional.

Know what you are covered for

Health funds often have rules in place for what services they will and will not pay rebates for. Some of this is in the fine print of your policy, and you may not realise exactly what you are covered for unless you check before each service is provided. It is recommended that you read your health fund policy to know what you are covered for. This will help you to work out if the policy meets your healthcare needs. Your dental practice may be able to provide you with a rebate quote through the terminal that claims are processed through.

Using comparative websites

In Australia, there are websites that offer to compare private health insurance polies and provide you with a list of possible options. While this can make the process of comparing policies simpler, these websites may not be considering every possible policy. You may find it more effective to go to the government website privatehealth.gov.au or choice.com.au which offers detailed and unbiased information on policies by private health insurance funds. 

Your circumstances may change from time to time, so it is a good idea to regularly check that your health insurance policy continues meet your needs. If you feel you are not getting the value you would like, you may wish to seek out a new policy, a new fund or both.

It is easy to assume that the policies and products of larger health funds are superior. However, many of the smaller private health insurance funds offer polices that provide more detailed, generous cover and provide higher rebate amounts. Therefore, you should make sure that any search you undertake includes as many different health funds as possible.

Preferred provider health care

Some private health insurers have arrangements with health care professionals that provide services that are covered by extras cover. These health professionals provide services to the health fund members at a higher benefit rate than health professionals without these arrangements. These are known as preferred providers.

Health insurers will recommend these professionals and their dental clinics to their members. Health funds may advertise “no out of pocket expenses’ or “reduced out of pocket expenses”, but this may only apply to preferred provider health professionals and clinics.

​If you are referred to a dental specialist for care and your health fund suggests that you visit a general dentist in their preferred provider network instead, have a discussion with the dentist that referred you to the dental specialist. The dentist has made a clinical decision that you require specialist care, and the health fund may not understand your treatment needs.

Just because you have private health insurance with a company that has preferred provider dental clinics, you have the choice in what dental professional you see for your oral health care. 
 

Making a complaint

If you experience any problems, the first step should be to contact your health fund directly. Making contact in writing can help to ensure your conversation with the health fund is documented. If they are unable or unwilling to assist you, or you feel that you have been given the wrong information, you can make a complaint to the Commonwealth Ombudsman.

The number of complaints made about private health insurance has increased year-on-year in recent years. 3562 complaints were received in the past year from 1 April 2020 to 31 March 2021, as reported by the Commonwealth Ombudsman. Complaints primarily related to benefits paid by the private health insurer. For example, what you thought you would receive back isn't what you get or perhaps the treatment you received isn't covered.

When you make a complaint, the Ombudsman will determine how serious it is, and if further investigation is needed. They will decide if the health fund's initial response was appropriate or whether additional action by the Ombudsman is needed.

To lodge a complaint, go to the Commonwealth Ombudsman and select the Private Health Insurance Ombudsman option.

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More information

For more information on private health insurance, visit privatehealth.gov.au.