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Wondering how the new health insurance tiers work? Trying to decide if Basic hospital cover is enough, or if you should opt for Bronze, Silver or Gold tiers? Keep reading to find out everything you need to know about Basic health insurance in Australia.

But first, why do these new tiers exist?

To make health insurance easier to understand, the Australian Government introduced reforms, which required health funds to categorise their hospital products into 4 different tiers (Basic, Bronze, Silver and Gold) with 3 subset tiers (Basic +, Bronze+ and Silver +) from 1 April 2019. Although, health funds have until 1 April 2020 to make sure all of their products comply with these new reforms.

Tiers are classified based on how many clinical categories they cover (each clinical category includes certain hospital treatments), and higher tiers will cover more clinical categories.

So, why should you consider choosing Basic private health insurance? Let’s get a better understanding of what Basic hospital insurance policies may include.

What is Basic health insurance?

Basic health insurance is the lowest level of hospital cover a fund can offer under the government reforms after 1 April 2019. These policies will have limited features, but include basic hospital cover for hospital psychiatric services, rehabilitation and palliative care as a private patient in a public hospital.

What does Basic health insurance cover?

Basic health insurance policies will include (at a minimum) restricted^ basic hospital cover for the following three clinical categories:

Hospital psychiatric services. Hospital treatment and care for patients with psychiatric, mental, addiction or behavioural disorders, including psychoses like schizophrenia, mood disorders like depression, eating disorders and addiction therapy.
Rehabilitation. Hospital treatment for physical rehab of a patient related to surgery or illness including inpatient/day patient rehab, stroke recovery and cardiac rehabilitation.
Palliative care. Hospital treatment for providing quality of life care for a patient with a terminal illness, including treatment to alleviate and manage pain.

How does Basic health insurance compare to Bronze and Silver?

In comparison to higher tiers, Basic health cover in Australia covers the fewest hospital treatments.

A standard Basic policy is only required to include restricted^ basic private hospital cover for three clinical categories out of 38 total clinical categories; this is 18 fewer clinical categories than is included in the Bronze tier and 26 fewer clinical categories than the Silver tier.

However, if you want to be covered for more hospital treatments, health funds can also choose to offer Basic Plus policies.

What is a Basic Plus policy (and what does it cover)?

If a health funds chooses, they can offer Basic Plus (+) policies, which cover more than a standard Basic health cover policy.

Basic Plus policies can include additional restricted^ or unrestricted* basic hospital cover for one or more of the 35 clinical categories that are usually only included in Bronze, Silver or Gold tier policies. Although, this means a Basic plus policy may cost more than a standard Basic policy.

What isn’t covered under Basic health insurance?

A standard Basic private health insurance policy isn’t required cover any of the additional 35 clinical categories (and corresponding hospital treatments) that are included under Bronze, Silver or Gold tiers. However, basic hospital coverage for one or more of these clinical categories can be included in a Basic Plus policy, if a health fund chooses to offer it.

Clinical categories Basic tierBronze tierSilver tierGold tier
Brain and nervous systemX
Bone, joint and muscleX
Breast surgeryX
Chemotherapy, radiotherapy and immunotherapy for cancerX
Diabetes management (excl. insulin pumps)X
Digestive systemX
Ear, nose & throatX
Eye (not cataracts)X
Gastrointestinal endoscopyX
Hernia and appendixX
Joint reconstructionsX
Kidney and bladderX
Male reproductive systemX
Miscarriage and termination of pregnancyX
Pain managementX
Tonsils, adenoids and grommetsX
Back, neck and spineX
Dental surgeryX
Heart and vascular systemX
Implantation of hearing devicesX
Lung and chestX
Plastic and reconstructive surgery (medically necessary)X
Podiatric surgeryX
Assisted reproductive servicesX
Dialysis for chronic kidney failureX
Insulin pumpsX
Joint replacementsX
Pain management with deviceX
Pregnancy and birthX
Sleep studiesX
Weight loss surgeryX

Who might suit Basic tier cover?

A Basic tier policy would suit those who are taking out hospital cover purely to avoid the Medicare Levy Surcharge (MLS) or Lifetime Health Cover loading (LHC); for example, it may suit higher income earners, who are happy to rely on the Medicare public health system for their hospital care.

Is Basic health insurance worth it?

Basic level health insurance policies will be the lowest level of hospital cover a fund can offer, which means Basic health insurance in Australia may be worth it if:

  • you’re looking for lower-level basic health insurance coverage
  • you want to avoid paying the MLS or LHC.

However, as it has limited benefits, Basic hospital cover may not be worth it if you require cover for additional hospital treatments. If this is the case, a Basic Plus policy or a policy in the Bronze tier (or higher) may be more worthwhile.

Can I get a Basic ‘extras-only’ health insurance policy?

The classification of products in relation to the government reforms only applies to hospital products. However, there continues to be a full range of extras policies available, including entry level products.

Although, it’s worth noting that extras-only policies can no longer include the name of any metal, gemstone or semi-precious stone in their product name (i.e. Diamond or Platinum extras is no longer allowed). However, some combined policies (hospital and extras) may be named Basic hospital cover and extras.

What does Basic health insurance cost?

The cost of a Basic health insurance plan will depend on which health fund you’re with and what’s included in your policy. Basic health insurance policies will generally cost less than higher tiers (e.g. Bronze, Silver or Gold health insurance), as it typically covers less hospital treatments.

However, if you have a Basic plus hospital policy that includes additional coverage, it may cost more than higher tiers. A simple way to find out how much a Basic health insurance plan might cost is to compare policies online.

Ready to compare Basic health insurance?

If you use our health insurance comparison service, you can easily compare a variety of health insurance policies side-by-side in seconds. Our comparison service will also allow you to filter limited hospital cover, helping you more easily find Basic hospital cover.

Think you’ll need more than a Basic policy? Check out the other health insurance tiers.

Glossary of terms

^ Restricted cover – this means you’re covered as a private patient in a public hospital. It also means that if you go to a private hospital as a private patient, you’ll only receive a small benefit towards your accommodation fee and you won’t receive any benefits at all towards your theatre fees. As a result, you will have to pay substantial out-of-pocket costs.

* Unrestricted cover – this means you’re covered for your theatre and accommodation fees as a private patient in a private hospital or a private day hospital facility. It also means you’re covered up to the Medicare Schedule of Fees (MBS) for clinical categories included as unrestricted on your policy. Having this level of cover allows you to choose the doctor who treats you, provided your doctor has an arrangement with the hospital you want to be treated at, and the hospital you have chosen has beds available.

So, what are you waiting for?

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