Private health insurance waiting periods

Waiting periods are designed to help keep premiums lower for existing customers. Without waiting periods, people could sign up for cover, immediately claim expensive hospital treatment (such as joint replacement surgery) and then cancel their policy before contributing anything substantial via premiums. To combat this, insurance companies would charge higher premiums, meaning higher costs for existing customers.

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 on services you previously served while serving the waiting period for the upgraded benefits. 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. You’ll need to serve waiting periods if you’re upgrading to a higher level but only for clinical categories and inclusions you didn’t previously have. You may also need to re-serve waiting periods if you didn’t complete the original waiting period or if you’ve been without cover for an extended period.

There are a few exceptions to the above 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 hospital cover waiting periods, while the individual health funds set waiting periods for extras cover.  However, health funds have more flexibility with their extras waiting periods and may offer waived waiting periods for promotional purposes. These waivers typically apply only 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 waiting period as a general rule, especially with hospital cover.

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. 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.

Usually, health funds will enforce waiting periods for hospital cover for all policies. 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 you’ve already served the waiting period for a treatment, you won’t have to re-serve it, even if you switch to another policy and maintain continuous 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 waiting periods that apply to each policy. Just keep in mind that the waiting periods for hospital cover (excluding accidents and ambulance) are relatively standard across all health funds.

Always check your policy document for applicable waiting periods.

Waiting periods for obstetrics services (pregnancy and birth-related services) are usually 12 months. This means you’ll need to take out pregnancy cover at least 12 months before giving birth to be covered. If you deliver your baby early, before 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. If you choose a 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 range from 0 to 2 months for cheaper health services (e.g. general dental and physiotherapy), 6 months for services like optometry, 12 months for major dental or over a year for the most expensive services (e.g. hearing aids or laser eye surgery). Generally, the more expensive the service, the longer the waiting period is likely to be. Unlike hospital cover, waiting periods for extras cover are decided by the health fund, meaning there’s more variation between insurers.

The Private Health Insurance Ombudsman outlines some typical waiting periods for general health treatment, as shown in the table below.¹

Yes, it’s possible to purchase an extras cover policy that waives some waiting periods. Insurers often hold promotions where they waive some shorter extras waiting periods on eligible policies to encourage new members to join. When purchasing health insurance, be sure to see what offers are currently available.

However, it’s uncommon for insurers to waive 12-month waiting periods. For example, a promotion may waive waiting periods for 2 & 6 month waits like general or preventative services such as routine dental check-ups, but you’ll typically need to wait before claiming on major dental treatment, such as root canals or denture care which are usually 12-month waits.