Basic health insurance policies

Basic health insurance policies will include (at a minimum) restricted^ 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 quality-of-life care for a patient with a terminal illness, including treatment to alleviate and manage pain.

In some states, Basic level hospital policies may also come with ambulance cover, which can pay towards emergency ambulance services if your state government does not already cover you.

If a health fund chooses, they can offer Basic Plus or + policies, which include more than a standard Basic health insurance policy. Basic Plus policies can include additional restricted^ or unrestricted* cover for one or more of the remaining 35 clinical categories that are usually only found in higher-tiered policies.

However, this means a Basic Plus policy may cost more than a standard Basic policy. Depending on your health insurance needs it may be better to consider a Bronze tier policy which could be better value for money than a Basic Plus policy in some circumstances.

Compared to higher tiers, Basic hospital cover in Australia includes the fewest clinical categories and therefore pays a benefit towards the fewest hospital treatments.

This is what a basic hospital policy is required to include:

A standard Basic policy is only required to include restricted^ private hospital cover for three clinical categories out of 38 total. This is 18 fewer clinical categories than the Bronze tier and 26 fewer than the Silver tier. Meanwhile, Gold tier policies include cover for all 38 clinical categories.

If you want cover for more hospital treatments but don’t want a higher tier policy, some policies may include additional clinical categories; these are referred to as Basic Plus policies.

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 Medicare (Australia’s universal healthcare system) for their hospital care.

Basic health insurance policies are 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 the lowest and most restricted level basic hospital 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, Bronze or even a higher tier may be more worthwhile.

The base premium of a Basic health insurance plan will depend on your state, 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 includes fewer hospital treatments.

However, if you have a Basic Plus hospital policy, 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.

The government reforms regarding the classification of health insurance only apply to hospital products. However, there continues to be a full range of extras cover options available, including entry-level products. Lower-level extras policies usually come with lower annual limits and rebates, which could lead to higher out-of-pocket expenses. Because of this, you might actually save more on a higher level of extras cover, depending on how often you take advantage of the services offered to you.

Although, it’s worth noting that extras-only policies can’t include the name of any metal, gemstone or semi-precious stone in their product name (e.g. Diamond or Platinum extras are no longer allowed). However, some combined policies (hospital and extras) may be named Basic hospital cover and extras.