What Are Health Insurance Waiting Periods?

Co-author: TJ Ryan

What are waiting periods?

A waiting period is the time you need to wait from the day you buy a health insurance policy to the day you are allowed to make claims on a certain benefit covered by your policy. During the waiting period, the full cost to access these services will have to be paid by the policy holder.

When do waiting periods apply?

If you are buying health insurance for the first time, you will need to serve a waiting period for benefits in your policy that have one.

If you already have health insurance, and you are buying a different policy with a higher level of cover, or upgrading your existing policy to a higher level of cover, you will need to serve a waiting period for any “new” benefits that you have not previously had covered. Waiting periods also apply when you sign up for a new policy or a higher level of cover if you are seeking to cover a pre-existing condition that was not previously covered.

If you already have health insurance, and you are buying a different policy with the same level of cover or downgrading to a lower level of cover, you will not have to serve any waiting periods.

Can you waive a waiting period?

From time to time, health funds will waive the waiting periods on certain benefits. This may be available as a sign-up promotion for new members joining the health fund or existing members upgrading their cover. Ask your health fund about what they offer.

Health funds will sometimes “waive” waiting periods in certain circumstances.

What are the waiting periods for Hospital Cover?

Waiting periods vary across funds, as do the services offered. Typically, most funds will have a 12-month waiting period on pregnancy, as well as a 12-month waiting period on pre-existing conditions.

The Australian government has actually specified the maximum waiting periods that can be applied for hospital services:

• 12 months for pre-existing conditions
• 12 months for obstetrics (pregnancy)
• 2 months for psychiatric care
• 2 months for rehabilitation
• 2 months for palliative care (even for a pre-existing condition)
• 2 months for hospital admissions

Always check specific waiting periods with your individual health fund.

During the waiting period, the full cost to access these services will have to be paid by the policy holder.

Although there are waiting periods in place with some hospital services, in the event of an accident, the fund may cover the costs as per the policy during the waiting period.

Compare Health Insurance Policies with CANSTAR

What are the waiting periods for Extras Cover?

Waiting periods vary across funds, as do the services offered. Typically, lower-cost services such as general dental, optical, and physiotherapy can have shorter waiting periods – although not always.

Always check specific waiting periods with your individual health fund.

During the waiting period, the full cost to access these services will have to be paid by the policy holder.

Compare Health Insurance Policies with CANSTAR

Why do health funds have waiting periods?

Waiting periods are largely designed to make health insurance more affordable.

Unlike other personal insurances such as life insurance and income protection insurance, pre-existing conditions will not increase the premiums of nor restrict ability to obtain health insurance. This means that if waiting periods did not exist, someone with a pre-existing condition could wait until it gets really bad, sign up for health cover, claim the benefit on the surgery or medical services they need, and then cancel the policy immediately.

If waiting periods were not in place, then health insurers would have to pass on the cost of those “fly-by” policy holders to everyone – making health insurance even more expensive. This would hugely disadvantage health fund members who kept their insurance over the long-term.

Waiting periods are therefore the main way health insurance providers can protect themselves against the cost of opportunistic claims.

What happens to my waiting periods if I go overseas?

If you are planning to travel overseas, you should contact your health fund about suspending your health insurance while you are away. This is useful for two reasons.

First, your waiting periods are preserved – so you don’t have to re-wait the waiting periods when you return home. If you were partway through serving a waiting period when you left, then it “pauses”, and you continue counting down the remainder of your waiting period when you return home.

Secondly – and perhaps more importantly for most people – suspending your health cover means you can remain a member of your health fund, but you don’t pay any premiums during the time you are away. When you return, you start paying premiums again as if you never left.

Note that you cannot claim any health insurance benefits until your cover is resumed.

Your health fund will require proof of your travel and return, such as your boarding pass or a copy of your passport or visa. Each fund has different rules about this, so be sure to ask them before you leave the country.

It pays to compare policy waiting periods

The great thing about our private health insurance system is that there is plenty of choice. And as there is plenty of variation in the waiting periods that apply for some health procedures, it’s certainly worth comparison health insurance options.

Below is a table outlining the current minimum, maximum and average waiting periods of the health insurance finds in CANSTAR’s database, for some common procedures.

The good news is that Australia’s health legislation effectively means that you can change health insurers without having to sit out another waiting period, provided you have already fulfilled the required waiting period with your previous provider. Of course, if a new service or cover is added, you will still have to serve any waiting period that applies to that new cover.

Compare Health Insurance Policies with CANSTAR