What are health insurance waiting periods?

What are waiting periods and how do they work?

A waiting period is a period of time that you need to serve before you can claim for a particular service on your private health insurance. Waiting periods can apply to both the hospital and extras components of private health insurance, with the difference being that the maximum waiting periods for hospital procedures are set by the Australian Government, whereas the waiting periods for extras are determined by individual insurers.

Your waiting period will start on the day you either sign up for a new level of cover, or upgrade from one level of cover to a more comprehensive one. If, for example, you were considering having a baby but your existing private hospital cover did not include pregnancy and birth-related services, you would need to upgrade to an appropriate level of cover and serve the relevant waiting period, after which time you would be able to claim for these services.

What are the hospital waiting periods in Australia?

The Australian Government sets out the maximum waiting periods that health funds can apply to hospital cover. While waiting periods can differ between insurers, the Department of Health stipulates that hospital waiting periods in Australia can be no longer than:

• 12 months for pre-existing conditions
• 12 months for pregnancy and birth-related services (obstetrics)
• two months for psychiatric care, rehabilitation and palliative care (even if this is for a pre-existing condition)
• two months for all other services.

The Private Health Insurance Ombudsman advises that there is usually no waiting period if you need hospital or other medical treatment because of an accident that happens after your policy begins. It also notes that if you’re eligible, you may be able to upgrade your cover to receive mental health treatment in hospital without a waiting period.

What are the extras waiting periods in Australia?

Unlike hospital waiting periods, extras waiting periods are not set by the Government, and are instead decided upon by individual health funds. If you are considering upgrading your cover or signing up with a health insurance provider, you will therefore need to check its Private Health Information Statement (PHIS) to find out the exact waiting periods you will need to serve.

While there is some variation, waiting periods for extras cover tend to be fairly standard across Australian health insurers. According to the Ombudsman, though, examples of typical waiting periods for extras cover include:

• two months for benefits for general dental services (including teeth whitening and extractions) and physiotherapy
• six months for optical benefits, including glasses and contact lenses
• 12 months for major dental procedures, such as crowns and bridges
• 12 to 36 months for some high-cost dental procedures, such as orthodontics.

Some health funds may be willing to waive certain extras waiting periods, such as those for general dental services and physiotherapy, as a sign-up incentive for new members, but note that this is at the discretion of the individual health fund, and you will need to check before signing up.

Why do waiting periods exist?

Waiting periods exist in order to keep private health insurance affordable, according to the Ombudsman. If health funds did not impose waiting periods, then members would be able to take out or upgrade their cover shortly before a planned procedure, and then reduce or cancel their cover afterwards. If this were to happen, health insurers would need to raise their premiums to cover the cost of payouts for these procedures, and would pass the costs on to both new and long-term members.

Do waiting periods carry over between health insurers?

Waiting periods generally do carry over between private health insurers in Australia. This means that if you transfer your coverage from one insurer to another, most insurers will not require you to re-serve any relevant waiting periods you have already served, as long as there has not been a break in your cover. However, you will typically still need to serve a waiting period for any treatments you did not have access to under your old policy, or in cases where you have increased your level of cover for a particular treatment.

What happens to your waiting periods if you suspend your policy?

If you choose to temporarily suspend your health insurance policy for any reason – if you are going overseas, or experiencing financial hardship, for example – then you will be able to resume your cover again when you are ready without having to serve your waiting periods again. If you suspend your cover while you are still serving your waiting periods, then you will serve the remainder of these waiting periods once you resume your cover. The length of time for which you can suspend your private health insurance may vary between insurers, so if you are considering this, it is advisable to check how long your insurer will allow you to suspend your cover.