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What Are Waiting Periods for Hospital Cover?

All private health insurance plans have a waiting period before the health insurance company will pay out benefits for certain services and procedures. This waiting period applies to both new plans and increased coverage on an existing plan. The purpose of the waiting period is to ultimately protect policyholders.

Every health insurer in Australia is required by law to provide health insurance for citizens, and they can't charge higher premiums based on pre-existing conditions or other risks. Without waiting periods, people would be able to play the system by only taking out a private policy, or upgrading, when they knew they would need the benefits. This would force health plan providers to charge much higher premiums on all contributors.

The Australian healthcare system is made up of two basic parts: the public system and the private system. The public system is largely owned by the government, and citizens access public healthcare either for free or at reduced costs thanks to Medicare. The private system is made up of multiple healthcare providers that are owned and managed privately by specialists, private hospitals, and allied health. The private system is funded through a combination of sources including private healthcare companies, individuals paying for treatment, health insurance premiums, and government incentives.

What is hospital cover?

Hospital cover, as the name suggests, refers to the coverage you'll receive for hospital treatment. All citizens have public hospital cover, which means you'll be taken to a public hospital and treated for free in emergency situations thanks to Medicare. Elective procedures may also be performed under hospital cover, although there will often be long waiting periods. Public health coverage may also cover appointments and treatment received outside of a public hospital, though it will need to be with a healthcare provider that accepts Medicare benefits.

Private hospital cover offers more options than its public counterpart, and it can also help individuals avoid tax penalties. For starters, private hospital cover allows individuals to choose the private hospital they wish to be treated in, and they can opt to have their own private room. With public coverage, you will receive high-quality care, but you'll have no control over where it takes place.

There are varying levels of private hospital coverage, with the most basic offering choice of doctor and the opportunity to avoid public waiting lists, to the most advanced offering benefits that cover non-cosmetic plastic surgery, psychiatric services, rehabilitation, and more. Things that generally aren't covered under any level of private hospital cover are treatments that take place outside of the hospital. For example, appointments kept at an outside specialist like a geriatric neurologist generally wouldn't be eligible for hospital cover.

How long are hospital waiting periods?

Typically, waiting periods don't apply if you need treatment due to an accident following your purchase or upgrade to a new policy. Outside of that, the government sets maximum waiting periods for insurers. Insurance companies can set 12-month waiting periods for the treatment of pre-existing conditions as well as pregnancy and birth. Waiting periods for pre-existing conditions are reduced to two months if it involves psychiatric care, rehabilitation, or palliative care. The maximum waiting period is two months for all other circumstances.

Naturally, these waiting periods mean those planning to become pregnant will need to organize a health insurance plan far in advance. In some cases, it may be possible to upgrade a health plan and receive immediate psychiatric care in hospitals. Insurance providers can also impose waiting periods for general treatment, and they have more freedom in this regard. These periods will generally vary between two and six months, although waiting periods may be imposed for one year or more for expensive treatment and items.

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