Many people look to get the most out of their health insurance policy, but are often confused or dubious about lengthy waiting periods. While it may seem unfortunate to have to wait for services that are already being paid for, it is a necessary part of health insurance. Let’s take a look at why we have them, how long they need to be served for, and the cases where a person may be exempt.
What Are Waiting Periods?
A waiting period refers to the amount of time a health fund member is required to wait before making a claim on their health insurance policy. Waiting periods apply to first time health insurance members, or members who have taken out any additional benefits when either upgrading or switching their fund. Waiting periods would not normally apply if you are switching funds but are remaining on the same level of cover.
Who Sets Waiting Periods and Why Do We Have Them?
In Australia, waiting periods for some features of a policy can be determined by an individual fund, but for certain hospital benefits, the federal government is in charge of setting maximum waiting periods. The reason for this is to protect long-serving members by ensuring individuals don’t join a fund, make a major claim shortly after joining, and cancel their membership thereafter. This kind of behaviour affects other fund members as the price of premiums could increase to cover the ditched claims.
What are the Standard Waiting Periods for Hospital Treatment?
The federal government sets the following maximum waiting periods, which funds can apply for hospital treatment:
- 12 months for pre-existing conditions
- 12 months of obstetrics (pregnancy)
- Two months for psychiatric care, rehabilitation or palliative care (even in the case of pre-existing conditions)
- General two month wait for any other benefits
While it may seem a long time to wait in some circumstances, the good news is that once you’ve served your waiting periods, you won’t need to re-serve if you decide to switch to another health fund – as long as you’ve chosen the same or lower levels of cover. This is called a continuity of cover, and includes any waiting periods you’ve partially served – so if you do decide to switch to a new fund, you won’t be back at square one!
Please Note: There is no waiting period if you require hospital or medical treatment due to an accident that occurs after joining the chosen fund.
Are Waiting Periods Created Equal Among all Health Funds?
While most health funds will exercise similar waiting periods for hospital related benefits, waiting periods for general treatment (ancillary or extras) cover can be set by the individual health fund. Because of this, many health funds will compete for your business by offering special deals which waive waiting periods on certain extras.
Waiting periods for extras can significantly vary from fund to fund, but typically they are:
- Two months for general dental services and physiotherapy
- Six months for benefits for glasses or lenses
- Twelve months for any major dental procedures
- One to three years for some high costs procedures. I.e. orthodontics
Cases Where You May Need to Re-serve Your Waiting Period
In the case where your new cover is higher than your previous cover, you may have to re-serve a waiting period. This applies to any benefits, services, or treatments that
- Were not included on your previous policy
- Have increased in benefit
What about Benefit Limitation Periods?
There may be the option to extend waiting periods on chosen feature in order to decrease the cost of your health insurance premium. For example, you could extend the waiting period for a hip joint replacement for a further two years on top of the initial waiting period if you believe you will not need that service within that time frame. While it can decrease your premium, the downside is that your benefit limitation period may not automatically transfer if you decide to switch to a new fund. This is it’s important to read the fine details of your policy for specific information regarding waiting periods and benefit limitation periods for your particular policy.