Health insurance policies provide:

  • Hospital cover
  • ‘Extras’ cover
  • …and combinations of the two

For both hospitals and extras policies, comprehensive, medium and basic levels of cover are offered. They are differentiated, not by adding items to the base level, but by excluding them from the top level. As the level of cover – and premium – drops, medical services are excluded, so it’s vital that you look closely at the details. Make sure you understand what is excluded if you are considering lower levels of cover.

When you’re thinking about what you need to be covered for, it’s useful to look at what current health fund members claim for, in practice. 

Hospitals Cover – the big ticket items

Most people choose private hospital cover to protect themselves against the possibility of needing a major (i.e. expensive) hospital treatment. In 2014 in Australia there were 247,515 claims where more than $10,000 was paid (over half  between $10,000 and $20,000) and over 8,000 claims involved payments greater than $50,000.

In total, 58% of surgical procedures were carried out in private hospitals including:

  • 55% of major procedures for malignant breast conditions
  • 57% of hip replacements
  • 60% of chemotherapy (cancer) treatments
  • 64% of major joint replacements
  • 71% of lens procedures
  • 81% of same day mental health procedures

Some of the highest claims were for;

  • Treatment of a prematurely born infant – $565,346
  • Cardiovascular disease – $372,529 (mitral stenosis)
  • Cancer – $368,484 (cancer of the gallbladder)
  • Diabetes – $173,226 (type 2 diabetes mellitus with ketoacidosis)
  • Mental Health – $56,706 (recurrent depression)


Extras cover – think teeth, eyes and joints

As we pointed out in Should you have private health insurance, more people have ‘extras’ cover than hospital cover. More than half of all extras claims are for dental services (in dollar terms, see right). Second most important is optical. Joints come next with physiotherapy and chiropractic services.

If you are considering taking out private health cover, keep an eye out for our upcoming article on minimising private health insurance premiums.

What do we actually use it for?

In the year ending March 2015, private health insurance funds paid over $17.6 billion for treatments including;

$13 billion of hospital treatments ($8 billion in private hospitals)

$4.5 billion of ‘extras’ health services including; $2.3b for dental, $778m for optical, $377m for physiotherapy, $287m for chiropractic, and $174 million for natural therapies.


What are your thoughts?

Do you know what level of cover is right for you? Is there anything else you’d like to know about health insurance?

Join the conversation — leave a comment below and let us know what you’re thoughts are.

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