Real Health Insurance Q&A

Private health insurance helps reduce out-of-pocket expenses for some medical treatments and hospital stays that aren't covered by Medicare. There are two types of cover – Hospital and Extras – that can be taken out individually or combined. Hospital cover helps pay for some of the costs of treatment as a private patient, and gives you more freedom in choosing who treats you and where you're treated. Extras cover helps pay for a range of everyday non-hospital services that aren’t covered by Medicare, including dental, physiotherapy, optical and chiropractic.

There are many benefits to having private health insurance. While Medicare doesn’t cover the cost of everything you might need to maintain good health, private health insurance helps cover some of the out-of-pocket expenses for a range of health services and hospital expenses.

Depending on your income, having a level of Hospital cover may also have tax-related benefits. If your income is over $93,000 for singles ($186,000 for couples/families) and you take out and maintain private hospital cover for the full financial year, you could avoid paying an extra 1% to 1.5% in tax via the Medicare Levy Surcharge (MLS). Visit the Australian Tax Office website for specific rules for calculating income for MLS purposes.

Australia’s public healthcare system is known as Medicare. It provides free or low-cost medical care for certain health issues, but can involve long waiting periods if your condition isn't life threatening. Private health insurance helps you avoid long public hospital waiting lists and gives you more freedom in who treats you and where. Private health cover also helps reduce out-of-pocket expenses for your treatment and services that aren't covered by Medicare. Please note coverage may differ depending on your level of cover and policy exclusions, waiting periods, hospital excess and limits and whether you go to an nib Agreement Hospital, a non-agreement private hospital or a public hospital.

Real Health Insurance offers four types of Extras cover so you can choose a level of protection that suits your needs and budget, without paying for the services you may not need. Depending on which level you choose, Extras cover can help you manage the cost of treatments such as osteopathy, optical, physiotherapy, dental, podiatry, chiropractic and more. You can claim up to 70% of out-of-pocket expenses (annual limits, waiting periods and T&Cs apply).

Health insurance premiums aren't tax deductible, however you may qualify for the Australian Government Rebate. Depending on how much you earn and your level of cover, eligible policy holders can get a percentage of their health insurance spending back as either a discount on their premium or as a refund on their tax return. To be eligible for the rebate, you must be eligible for Medicare, have an appropriate level of hospital cover and meet the income requirement for the rebate. Find out more about health insurance here.

If you've served all waiting periods with your current insurer, you won't need to re-serve these. However, if you transfer before completing the waiting periods, you'll need to serve the remaining balance before you can claim. Additional waiting periods and higher annual limits may apply for services that aren't covered by your previous policy, if you've chosen a lower excess or if you wait more than 59 days after leaving your former insurer before taking out a new policy.

Waiting periods will apply for services not currently covered, services with higher benefits or where waiting periods haven’t been fully served. Where the excess on the new product is lower than the excess on the previous cover, the excess on the previous cover will apply until the unexpired waiting period has been served. Any benefit limits already used with your current fund will apply to your Real Health Insurance policy.

Cancelling your private health insurance now and rejoining in the future means you may have to pay Lifetime Health Cover loading costs and re-serve any waiting periods. You’ll also have to pay the Medicare Levy Surcharge each year that you don’t have Hospital cover if you earn $93,000 as a single or $186,000 as a couple or family.

Lifetime Health Cover (LHC) is a Government initiative aimed at encouraging people to take out private hospital cover earlier in life, and maintain it. If you don’t take out private hospital cover before 1 July after you turn 31, you’ll pay a 2% loading on top of your normal hospital premium for each year you don’t have hospital cover (up to a maximum of 70%). The loading applies for 10 years of continuous hospital cover. For every year you put off signing up for hospital cover, another 2% will be added. So if you wait until you’re 40, you’ll pay 20% more than someone on the same cover who joined when they were 31. For more information on LHC, click here.

Medicare Levy Surcharge (MLS) is another government initiative and may apply if you are a single and earn over $93,000 per year, or a couple and earn over $186,000, and don't have private hospital cover. The MLS is up to 1.5% of your income and is paid in addition to the Medicare levy, which is 2%. The surcharge is payable for every day you don't have private hospital cover within the financial year. The ATO uses a special definition of income (called income for MLS purposes) to determine whether you are liable to pay the MLS, and the rate of MLS you will have to pay. This income is different to your taxable income.

Find out more about LHC and the MLS by visiting the Australian Tax Office website.

Private health insurers are required to provide cover to anyone with pre-existing conditions, however they may impose a waiting period. You can still take out health insurance if you have a pre-existing condition, but you’ll only be able to claim after the waiting period has been served and if the procedure is covered by your policy.

Check your product Fact Sheet and Policy Booklet for information on waiting periods and inclusions. Waiting periods for private hospital cover are usually 12 months for pre-existing conditions and between 1 day to 12 months for other items.

An excess is the amount you pay when you make a claim for medical treatment under your Hospital cover. It does not apply to Extras cover. Your excess can impact your premium – by choosing a lower excess, your monthly premiums will be higher than if you were to choose a higher excess. An excess is different to out-of-pocket expenses or a ‘gap’, which are fees that aren't covered by Medicare, and are in addition to your Hospital cover excess.

Everyone has different needs when it comes to their health. When choosing the most suitable health insurance for your needs and budget, the first step is to consider whether you need cover as a single, couple or family. Next, decide what treatments and services you’d like to be covered for, then settle on your level of excess (if applicable) and monthly premium payments. With Real Health Insurance you can take out cover online in less than 10 minutes or call us on 1300 953 162 for more information.