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Last Updated on 7 October 2019

Health Insurance and Pre-Existing Conditions

Millions of Australians are covered by private health insurance. According to recent APRA figures, over 11 million Australians have hospital cover and over 13.5 million Australians have extras cover. Private health insurance can provide benefits for services that Medicare doesn’t, and it also gives you more control over your health decisions, such as choosing your doctor and hospital.

However, it’s critical to be aware of restrictions on cover due to pre-existing conditions. If you’re buying insurance for the first time or are upgrading to a higher level of cover, be aware that you may not be immediately covered for all existing medical conditions.

Key Points
  • Pre-existing conditions are medical conditions that are present prior to upgrading your health cover or buying health insurance for the first time.
  • If you have a pre-existing condition when purchasing your first policy, you will face a waiting period of up to 12 months for hospital cover.
  • When switching to a policy with an equal or lesser level of cover, you will not have to re-serve waiting periods for hospital cover.

What are Pre-Existing Conditions?

Pre-existing conditions are medical conditions that were present prior to taking up private health insurance. If your health insurance policy lapses and you develop a medical condition, it will be considered a pre-existing condition when you take up your next policy.

The Department of Health use the following criteria to identify a pre-existing condition:

  • The signs or symptoms of the medical condition must have been “reasonably apparent” or “reasonably evident” in the six months before signing up for insurance OR
  • You have some symptom, sign or impairment that would have been apparent to a reasonable GP conducting a routine external examination if you had sought a medical exam.

How do Insurers Define Pre-Existing Conditions?

Your insurer may determine that you have a pre-existing condition even if you do not have a previous diagnosis. As explained by the Private Health Insurance Ombudsman, it is up to the medical adviser appointed by the health insurer to decide if your existing health conditions qualify as pre-existing.

If the signs or symptoms of a condition were present 6 months prior to becoming insured (or anytime within those 6 months), it may be considered a pre-existing condition. This is true even if you were not previously aware of the condition.

For example, if you have a lump in your breast before you sign up for insurance and are diagnosed with breast cancer afterwards, the cancer would likely be considered a pre-existing condition.

I Have a Pre-Existing Condition. Can I Still Get Insured?

Yes, you can get health insurance even with a pre-existing condition. There are no limits or restrictions on the type of cover you can buy, but waiting periods will likely apply.

Insurers usually impose a waiting period on pre-existing conditions, which means you’ll have to serve the waiting period before you can make claims. Waiting periods apply to new policyholders and when you upgrade to a higher level of benefits.

Waiting Periods for Pre-Existing Conditions

The Private Health Insurance Act 2007 permits health insurers to impose a maximum 12-month waiting period on hospital cover for pre-existing conditions.

Maximum waiting periods are as follows:

  • 12 months for hospital treatment for pre-existing conditions
  • 12 months for hospital-substitute treatments for pre-existing conditions
  • Two months for hospital or hospital substitute treatments for psychiatric care, whether or not you had a pre-existing condition
  • Two months for rehabilitation or palliative care, whether or not you had a pre-existing condition

Waiting periods for extras (also called general) cover is at the discretion of the insurer. Legally, there are no restrictions on waiting periods for pre-existing conditions when it comes to extras cover. This means the insurer can decide if and how long the waiting periods are for this type of cover.

Health Insurance Waiting Period Estimator

You will have to serve a waiting period when you start a new private health insurance policy or increase your level of cover. A waiting period protects members of the fund by ensuring that individuals aren't able to make a large claim shortly after joining and then cancelling their membership. This kind of behaviour would result in increased premiums for all members.

Use this calculator to choose a hypothetical date in the future (or leave it on the default setting, which is today's date) to determine when you will be covered for various types of coverage.

Months Standard Waiting Period
  • Accidents
  • Ambulance
  • Chiropractic/Osteopathic
  • Alternate/Natural Therapies
  • Dietetics
  • Eye Therapy
  • Hospital Treatment
  • Occupational Therapy
  • Pharmaceutical Perscriptions
  • Physiotherapy
  • Podiatry
  • Speech Therapy
  • General Dental
  • Optical
  • Orthotics
  • Major Dental
  • Pre-Existing Conditions
  • Pregnancy Related Services

Waiting periods can be frustrating, but they’re in place to prevent people from upgrading to higher levels of cover only when they require it. For example, someone could be diagnosed with cancer and then immediately switch to comprehensive cover before commencing treatment. Then, when treatment had concluded, they could downgrade to a lower level of cover.

In this case, the individual would save money, but it would be the long-term members who would bear the brunt of the expenses, possibly in the form of higher premiums. Waiting periods are in place to stop this from happening.

Switching Insurers When You Have a Pre-Existing Condition

The good news is that you don’t have to sit the same waiting periods twice; they usually only apply when you buy insurance for the first time or if you are moving to a higher level of cover. Portability laws are in place to ensure that you don’t have to re-serve waiting periods for the same level of cover when switching plans without an extended gap in your cover.

However, it’s important to note that these laws only apply to hospital cover. If you switch your extras policy, your new fund can impose a new waiting period if they so desire. Fortunately, pre-existing conditions will not disqualify you from coverage with most insurers. Be sure to check with your new fund about any waiting periods that apply before commiting to a switch.

If I Have a Pre-Existing Condition is it Too Late to Get Health Insurance?

Insurance was developed to protect you against life’s unexpected events, like an accident or unforeseen illness. If you have a pre-existing condition but don’t yet have health insurance, that doesn’t mean it’s too late. Health insurance may still cover you for things unrelated to your condition. However, it is still best to have your insurance in place before a medical condition arises.

If you don’t have any pre-existing conditions, securing your health insurance now is a smart move. Depending on your level of cover, you’ll already be covered should you be diagnosed with a medical condition down the line. Otherwise, you may be faced with the difficult decision of paying out-of-pocket, foregoing a much-needed treatment or relying on the public health system —and that’s a decision no one should have to make.

Frequently Asked Questions About Health Insurance

There are three types of health insurance in Australia. They are:

  • Hospital Cover
  • Extras Cover (also known as general or ancillary cover)
  • Ambulance Cover

Hospital cover can ensure any unexpected surgeries, treatments or hospital stays you may require will be covered. With appropriate cover you will have the flexibility to choose your own doctor and the option of receiving treatment in a private hospital.  Most hospital covers allow you to stay in a private room. One other perk is skipping the public hospital systems’ waiting list, which can be lengthy for non emergency treatment.

Extras cover pays benefits for a a range of services, often including treatments and procedures related to the fullowing:

  • Dental/oral health
  • Glasses and contact lenses
  • Podiatry
  • Physiotherapy
  • Psychulogy
  • Acupuncture
  • Remedial massage
  • Chiropractic
  • Hearing aids
  • Travel vaccinations

Ambulance cover, as the name suggests, will cover you should you require emergency ambulance transport. In an emergency, there is enough to worry about. Having the expenses covered for provides security and peace of mind. Many hospital covers include emergency ambulance transport If yours doesn’t, you will need to shop for this separately.

Life is unpredictable. You never know when you might need cover. No matter what life stage you’re in, there’s a policy out there for everyone. You can select as much or as little cover as you want, depending on your health needs and requirements. It’s a small price to pay for the peace of mind health cover provides.

There is no one answer here. Costs vary across providers and policy types. Just because a policy is cheap, that does not mean it is ‘value for money’ and vise versa. Make sure you check what’s included and excluded in a policy before signing up, as you want to purchase a policy that best fits your specific needs.

Premium: A premium is the price you pay for your insurance policy (it may be paid annually or on an ongoing basis).

Policy: An insurance plan. In other words, it is the type of insurance you choose to select.

Policy Holder: The owner, or ‘holder’ of a policy.

Claim: In the event that you require treatment for a service covered by your policy, you can lodge a claim for reimbursement of all or part of the cost of that treatment.. These days, most claims are submitted electronically by the health care provider (dentist, physio etc)

Lifetime Health Cover: Lifetime Health Cover was put in place to encourage young Australians to seek out and maintain ownership of private health insurance early in their lives. If you do not take out a policy before you turn 31, extra charges will be applied should you take out a policy at a later time.

This means you will pay a 2% loading on top of your premium for every year that passes after you turn 30. For example, if you take out a policy for the first time at age 32, you will be charged 4% of your premium as an extra, then at age 40, 20% and so on, up to a maximum loading of 70%.

The loading is payable for 10 consecutive years of cover - after which it is removed and you premiums will be reduced.

Pharmaceutical Benefits Scheme (PBS): Medicare offers assistance for Australians with many of their their prescribed medication costs through the PBS. This assistance is in the form of subsidies towards the cost of many medications. You can check if your prescribed medication is on the list of subsidised items here.

Medicare Levy Surcharge: The Medicare Levy Surcharge is an additional charge (tax) applied to single Australian taxpayers who earn over the income threshold of $90,000 per year, or families/couples who earn over $180,000 per year. This surcharge is only applied to those who choose not to have a private health insurance policy.

The surcharge is designed to reduce pressure on the public health system by encouraging those with higher incomes to invest in private health cover.

Private Health Insurance Rebate: The government’s Private Health Insurance rebate lowers premiums for most Australians with private health insurance Older Australians may enjoy an even higher rebate. Our calculator can help you estimate the Government health insurance rebate you may receive.

Disclaimer: The above information is correct and current at the time of publication

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