Key Features Guide. What you should know before purchasing private health insurance

Transcription

1 Key Features Guide What you should know before purchasing private health insurance

2 Table of Contents USING THIS GUIDE KEY FEATURES OF HEALTH INSURANCE HEALTH INSURANCE TERMS TYPES OF INSURANCE Hospital cover Ancillary (extras) cover MEDICAL SERVICES OUTSIDE OF HOSPITAL HOSPITAL COVER - WHAT DOES IT MEAN TO BE A PRIVATE PATIENT? Private patient in a public hospital Private patient in a private hospital MEMBERSHIP WAITING PERIODS Hospital cover What is the 12 months pre-existing condition waiting period? What is included in the 12 months obstetrics waiting period? Ancillary (extras) cover TRANSFERRING BETWEEN FUNDS FEATURES OF HOSPITAL COVER THAT MAY REDUCE YOUR INSURANCE PREMIUM Excess Co-payments Benefit exclusions Restricted benefits GAP PAYMENTS GAP PAYMENTS FOR HOSPITAL COVER GAP PAYMENTS FOR ANCILLARY SERVICES THINGS TO CHECK BEFORE HAVING TREATMENT LIFETIME HEALTH COVER MEDICARE LEVY SURCHARGE HEALTH INSURANCE SUMMARY OF THE KEY FACTORS TO CONSIDER MEMBER COMPLAINTS MORE INFORMATION?

3 USING THIS GUIDE This Key Features Guide aims to assist you to better understand private health insurance products. It is presented in accordance with guidelines developed by the Australian health insurance industry, the Commonwealth Government and consumer groups. The guide provides an explanation of the main features of health insurance products that you need to consider when choosing health insurance. Every health fund has developed a Key Features Guide like this to assist you. When choosing your private health insurance, it is important to make sure it suits your particular health needs, as well as your budget. Not all of the features described are necessarily available in all products offered by all funds. It is, therefore, important that you check the individual product descriptions to make sure they meet your current needs.

4 Part 1 - Key Features of Health Insurance HEALTH INSURANCE TERMS When you take out health insurance you are purchasing a product (a health insurance policy) from a private health insurance organisation (a fund). The extent of insurance cover you obtain depends upon the health insurance product you choose. The money you pay to purchase this insurance cover is called a health insurance premium. The money the fund pays for treatment you receive is called benefits. TYPES OF INSURANCE There are two types of private health insurance cover available: hospital cover; and ancillary (or Extras) cover. Hospital cover Hospital insurance covers all or some of the costs of hospital treatment as a private patient including doctor s charges and hospital accommodation. The level of insurance cover you receive depends upon the product you choose. Ancillary (Extras) cover Ancillary cover helps with the cost of services such as physiotherapy, dental and optical treatment that are not covered by Medicare, nor associated with a hospital admission. Some funds offer packaged policies that cover both hospital and ancillary services, or you may select a combination of products to best suit your needs. It is possible at any time to change the type of health insurance product you have to meet your changing needs. For example, you can add ancillary cover if you only have hospital cover. It is also possible to change the level of cover, for example, by upgrading to a product with a higher level of cover. Although it is usual, it is not necessary for you to hold your hospital cover and ancillary cover with the same fund. MEDICAL SERVICES OUTSIDE OF HOSPITAL Under Commonwealth legislation health funds cannot pay for costs associated with visiting your general practitioner or a specialist outside of hospital. In these circumstances, Medicare will cover 85% of the Government set fee for these services. If the medical practitioner bulk bills he/she will only charge the amount Medicare covers, and you will not have to pay any medical gap charges. If, however, the medical practitioner charges above the amount Medicare covers, you will have to pay the gap between the Medicare reimbursement and the doctor s fee. HOSPITAL COVER - WHAT DOES IT MEAN TO BE A PRIVATE PATIENT? Private patient in a public hospital Being a private patient in a public hospital gives you choice of doctor. Depending on your illness or condition and your needs, this may or may not be the same doctor you would have been allocated by the hospital as a public patient. Private patient in a private hospital Being a private patient in a private hospital or day hospital facility gives you a choice of doctor and hospital, as well as access to hospital services at a time that may better suit your needs. MEMBERSHIP You become a member of a health insurance fund when you purchase a health insurance product. There are four possible categories of health insurance membership. Single membership provides cover only for the one person named on the membership application. Couples Membership provides cover for the member and the member s nominated partner. Family Membership provides cover for the member, the member s nominated partner and/or dependants. Single Parent Membership covers the member and the member s nominated dependants. Not all health funds offer all four membership types as separate categories. Some funds have instead simplified these categories into single membership or family membership.

5 WAITING PERIODS Hospital cover When you join a health fund or upgrade your existing level of hospital cover, you may have to wait some time before you can claim benefits for some services. This is called a waiting period. Waiting periods that apply to hospital cover include: 12 months for treatment related to a pre-existing condition; 12 months for obstetrics (pregnancy) services; and 2 months for all other hospital treatments except accidents. Health funds can waive or reduce these waiting periods but they cannot be increased. What is the 12 months pre-existing condition waiting period? When you decide to take out or upgrade your hospital cover you may already be ill. You have what is referred to as apre-existing condition or ailment. A pre-existing condition means an illness or condition, the signs or symptoms of which existed anytime in the 6 months before the day on which you joined or upgraded to a higher level of hospital cover. Whether an ailment is pre-existing is determined by a medical practitioner appointed by the health fund. It is not necessary for you or your doctor to have diagnosed the condition - signs and symptoms only have to be in existence. In making this judgement, however, the fund appointed practitioner must also consider the opinion of your own medical practitioner. This means if you have less than 12 months membership and you need hospital treatment, you should confirm with your fund whether or not the pre-existing condition waiting period applies to you. It is important you confirm your eligibility for benefits before you are admitted to hospital. Otherwise if you proceed with your admission and your condition is subsequently determined to be pre-existing you will be required to pay all outstanding hospital and medical charges. Funds will require you to obtain facts about your illness from all your treating practitioners and will need a number ofbusiness days to make this assessment. So if you have less than 12 months membership on your current hospital policy, contact your fund as soon as you know you have to go to hospital. What is included in the 12 months obstetrics waiting period? The maximum 12 months obstetric waiting period applies to costs associated with the actual birth of a child includin antenatal care, the management of labour and delivery and post-partum care (care post delivery). A maximum 2 month waiting period may be applied to all other pregnancy or gynaecological related services provided in a hospital or day hospital facility. You should be aware that in nearly all circumstances assisted reproductive services, sterilisation and reversal of sterilisation are considered to be pre-existing before you took out the product and a 12 month waiting period will apply. Make sure you clarify your eligibility for these treatments with your health fund prior to admission. Ancillary (Extras) cover Waiting periods for ancillary services are not regulated by the Government and may vary between products and between health funds. There are usually different waiting periods for different ancillary services. You should check the waiting periods on ancillary services carefully when choosing your health insurance fund and product. TRANSFERRING BETWEEN FUNDS If you have hospital cover, you can transfer between funds at the same or a lower level of cover, without serving additional waiting periods. This is sometimes called portability between health funds. The fund you transfer to must give you credit for any waiting periods already served. You may have to serve additional waiting periods if you upgrade your level of cover even if it is with your current fund. You should also be aware that the fund to which you transfer may not provide exactly the same hospital benefit entitlements as the one from which you have transferred. Check the details with the funds involved before transferring. Health funds are not required by law to recognise waiting periods served for ancillary services, but many funds do. Any claims made with your previous fund for ancillary services may be taken into account by your new fund. Check the details with the funds involved before transferring. For more information on what you can expect if you do change health funds, collect the brochure titled The Right to Change produced by the Private Health Insurance Ombudsman, and available from either your health fund or the Ombudsman s office. Contact the Ombudsman s Office on free call or (02) or info@phio.org.au

6 FEATURES OF HOSPITAL COVER THAT MAY REDUCE YOUR INSURANCE PREMIUM You can reduce the cost of health insurance by choosing a product that has some or all of the following features: An Excess; A Co-payment; Benefit exclusions for certain treatments; Restricted benefits. Each of these features is explained below. It should be noted that, in general, choosing a product where the premium has been reduced through an excess, co-payment, etc, would lead to a lowering of benefit levels or an increase in what you pay for treatment. Make sure you read and understand what is covered and what is not. If you are unsure of any of the terms or exact treatments that are excluded or pay limited benefits, ask your fund. Excess An excess is an amount of money you pay towards the cost of hospital treatment, regardless of the number of days of hospitalisation. For example, Mary and Tom and their children, Mark and Samantha have a family membership with an excess of $300. This means that they are charged a lower premium for their hospital insurance because they have agreed to pay the first $300 of hospital charges if they require hospital care. With some policies, this excess is only charged once a year, regardless of the number of hospital admissions required throughout the year by the people covered by the product. Under other excess policies, the excess may apply on each hospital admission in the year. When choosing a health insurance product make sure you understand how these excess payments apply. Co-payments With a co-payment, in return for a lower premium, you pay an agreed amount towards the total cost of each day spent in hospital. Some funds place an upper limit on the number of days for which you are required to make a co-payment. Some funds also refer to a co-payment as an overnight excess or patient moiety. For example, in the case of Mary and Tom, the cost of the premium for their hospital cover would be reduced if they agree to a co-payment. For example, they might agree to pay the first $50 for each day s hospital admission. If Mary is in hospital for five days, they will pay $250 (that is, $50x5). The total amount of co-payment which a member can face in a year is often limited. Benefit exclusions Some lower cost health insurance products specify that certain hospital treatments are not covered and no benefits are payable. These are called exclusion products. If you choose an exclusion product, you need to be careful that you do not exclude treatments that you may need in the future. The need for some treatments that are excluded, e.g., for coronary disease, is not always easy to predict. Restricted benefits Some health insurance products allow you to choose to be covered for only a minimum level of benefits for certain treatments in return for a lower premium. Some restricted benefits products sometimes referred to as basic benefits, only entitle you to basic benefits for accommodation but do not cover any theatre fees, intensive care unit, coronary care unit, labour ward or same day theatre fees. Other restricted benefits products, pay minimum accommodation benefits and also pay some but not all, of the costs for theatre fees, intensive care unit, coronary care unit, labour ward or same day theatre fees. You should check with your health fund to ensure that you fully understand your benefit entitlements if you choose a restricted benefits product. You should also be aware that there is generally a significant price difference for hospital accommodation in a public hospital compared with a private hospital.

7 GAP PAYMENTS GAP PAYMENTS FOR HOSPITAL COVER A gap payment is the difference between the fee charged by the hospital or doctor who treats you in hospital and the benefit paid by your health fund. Gap payments for hospital treatment can occur for the following 3 reasons: 1. Product choice Gap payments will arise if you have chosen a hospital product with an excess, a co-payment, or an exclusion or restricted benefits for certain procedures. 2. Gap payments hospital accommodation Some hospitals have an agreement with individual health funds to charge an agreed amount for treatment so that you will have either no out-of-pocket expenses for hospital or medical related services or you will know before-hand what costs you will bear. Gap payments for hospital accommodation can also arise if you choose to be treated in a hospital that does not have an agreement with your health fund. A list of agreement hospitals is available from your health fund. Wherever possible, you should always contact your fund before hospitalisation to confirm the level of benefits that will be paid. 3. Gap payments doctor s fees for in-hospital services Gap payments may also arise for medical services received in hospital. When you receive medical treatment in hospital as a private patient, Medicare pays 75 per cent of the Commonwealth Medicare Benefits Schedule (MBS) fee for the doctor s service and your health fund pays the remaining 25 per cent of the MBS fee. If your doctor charges above the MBS fee, you may have to pay the difference between the MBS schedule fee and the doctor s fee. Your health fund may be able to cover the gap, in full or in part, that is above the MBS if: there is an agreement between your fund, hospital and/or doctor; or the fund has a gap cover scheme. Where there is an agreement or scheme you will have either no out-of-pocket expenses or you are entitled to be given an estimate of the costs you will have to pay in advance. You should ask your doctor for an estimate of any costs you will have to pay, even when there is no scheme or agreement. All funds now offer gap benefits as part of most hospital insurance products. In most cases these benefits have been added to existing hospital products so you may already be covered for all or part of the medical fee gap. However, you should check with your fund or doctor. GAP PAYMENTS FOR ANCILLARY SERVICES Gap payments can also occur if the fee charged by your service provider such as dentist, physiotherapist or optical dispenser, is greater than the benefit paid by your fund for that service. The level of benefit health funds pay for ancillary services is at the discretion of health funds and is not regulated by the Government. Some health funds impose annual limits on the benefits payable for some ancillary services. Some health funds also have agreements with ancillary service providers to reduce or eliminate out of pocket expenses. These agreements with hospitals, doctors and ancillary service providers may change over time. THINGS TO CHECK BEFORE HAVING TREATMENT Before agreeing to either in-hospital treatment or receiving treatment for ancillary services you should: Speak to your health fund to confirm the level of benefits payable and whether any waiting periods apply in particular whether or not the pre-existing ailment waiting period will apply. You should also check whether there is an agreement between the your health fund and the hospital. Speak to your doctor or ancillary service provider to find out if they have arrangements with your health fund that minimise the out-of-pocket expenses you have to pay. This will help to ensure that you don t receive any unexpected bills after your treatment. You should also check this detail with your health fund. In cases such as an emergency admission, it may not be possible to discuss fees prior to treatment. Where this occurs the hospital, health fund and doctors should provide you with this information as soon as possible after treatment.

8 LIFETIME HEALTH COVER Lifetime Health Cover is a Federal Government initiative that rewards people for taking out hospital cover at an early age and maintaining that cover throughout their lifetime. Under the current Lifetime Health Cover scheme if you do not take out Hospital cover by 1 July following your 31st birthday you will pay an extra 2% over the base rate. This increases for every year you are over the age of 30, up to a maximum of 70%. This means that a person who is 35 years old and does not take out health insurance until after 1 July will pay 10% more for their health insurance, compared to only 8% prior to 1 July. People born before 1 July 1934 are exempt from Lifetime Health Cover and can take out hospital cover at any time and not pay a premium loading. All hospital policies, except overseas visitor's cover, offered by registered health Funds meet the Lifetime Health Coverrequirements. More information on Lifetime Health Cover is available from the Department of Health and Aged Care website at MEDICARE LEVY SURCHARGE Where high-income earners do not take out private health insurance, they are charged an additional 1% on top of the Medicare Levy. If you are a high-income earner and seek to avoid the additional 1% Surcharge you need to make sure you have purchased hospital cover with an excess less than or equal to $500 per annum for single contributors or $1,000 per annum for couples and families. More information on the Medicare Levy Surcharge is available from the Department of Health and Aged Care website at or the Australian Taxation Office at or ATO special helpline HEALTH INSURANCE SUMMARY OF THE KEY FACTORS TO CONSIDER The LEVEL of cover you choose determines the BENEFITS you receive. The higher the cover, the higher the COST of the premium within each fund. WAITING PERIODS will have to be served BEFORE you are entitled to benefits. BENEFITS can be INCREASED by having treatment with a service provider, doctor or hospital that has an AGREEMENT with your fund. BENEFITS can be LIMITED by choosing a product which has: AN EXCESS; A CO-PAYMENT; EXCLUDED BENEFITS FOR CERTAIN TREATMENTS; RESTRICTED COVER FOR CERTAIN CONDITIONS; ANNUAL LIMITS ON THE TOTAL BENEFITS PAYABLE FOR SOME ANCILLARY SERVICES. MEMBER COMPLAINTS If you have a problem with your private health insurance you should: 1. Contact the fund directly. 2. If you are unable to reach a satisfactory agreement with your fund after written communication, contact the office of the Private Health Insurance Ombudsman. The Ombudsman is independent of the health funds and the Government and is able to provide free information and assistance to resolve complaints. The Ombudsman s office can be reached on the free call number or directly on (02) Alternatively you can write to the Ombudsman at Suite 1201, Level 12, 31 Market Street Sydney NSW 2000 or fax (02) or info@phio.org.au. MORE INFORMATION? More detailed information is available from GU Health Just call our Member Relations Team on If you do receive advice over the telephone, make sure you also request confirmation of this advice in writing. It is also a good idea to note down the full name of the operator you spoke to and the date and time that you called for easy reference.

9 NOTES

10 GU Health Member Relations Team am - 5pm (EST), Mon - Fri Australia-wide JMA8914 Grand United Corporate Health Limited ABN is a registered health benefits organisation. A member of the Australian Unity Group. Grand United Corporate Health respects the privacy of our members. For full details contact our Member Relation Team on