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’ve transferred to a new hospital or extras policy with the same or lower level of coverage as your previous one, provided you’ve already served the applicable waiting periods and have not exhausted your limits for the treatment you’re looking to claim for.

If you’re adding to or upgrading your existing hospital or extras cover, you’ll still be subject to waiting periods for those additional services you’re gaining from the upgrade. However, you’ll typically still be able to claim your benefits on a lower level of hospital cover. For example, say you have an annual limit of $500 to claim on general dental services and upgrade to a policy with a $750 limit. In that case, you can still claim up to $500 on dental services (provided you haven’t already claimed this limit) 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’ve 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’ll 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 went without cover between policies for too long.

The Australian Government sets the maximum waiting periods for hospital policies, which health funds are required to stick to. Although, they have more flexibility with their extras waiting periods and may offer waived waiting periods for promotional purposes. These waivers typically only apply to shorter waiting periods, such as 2 or 6 month waiting periods.

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 (except for psychiatric care, rehabilitation and palliative care) relating to any pre-existing medical conditions you have. 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 these are:

• 12 months for treatment relating to a pre-existing condition (excluding cover for palliative care, rehabilitation and psychiatric care). This is an ailment, illness or condition you showed signs or symptoms of in the 6 months before taking out a hospital policy 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 restricted 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. You can also compare health insurance policies to review the different waiting periods that apply for different policies. Just keep in mind, the waiting periods on hospital cover (excluding accidents and ambulance) are standard across all health funds.

Always check your policy document for applicable waiting periods.

You need to take out pregnancy cover at least 12 months before giving birth 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 as an inpatient in a public or 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 can be as little as 0 to 2 months for cheaper services (e.g. general dental and physiotherapy), but can be a lot longer, such as 36 months, for more expensive services (e.g. hearing aids or laser eye surgery).

The Private Health Insurance Ombudsman outlines some typical waiting periods for general health 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 an eligible private health insurance policy.

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, but you’ll need to wait before claiming on major dental treatment, like root canals or denture care.