Understanding health insurance waiting periods

Similar to other types of insurance products, health insurance also has waiting periods. This is the amount of time you must wait after finalising your policy before you are entitled to receive benefits, and the waiting period can differ for different benefits. Read on to find out about the different types of waiting periods.   

You may be wondering, ‘why do health insurance policies have waiting periods?’, and that’s a valid question. It has an equally valid answer: 

According to the Commonwealth Ombudsman, if there were no waiting periods, people could take out insurance or upgrade to a higher policy only when they know or suspect that they might need medical treatment. They can they easily cancel their cover as soon as their treatment is over. This would lead to other health insurance policyholders having to bear the brunt of these costs in the form of increased premiums!

Types of waiting periods

There are different types of waiting periods and you should familiarise yourself with some of the common ones before finalising your policy. Once you have taken out your policy, you should make yourself aware of the waiting periods applicable to you by reading your policy documents.  

Waiting periods for newly insured members

Newly insured members need to be with a health fund for a set period of time before they are entitled to claim for a treatment. This means that no benefits will be payable for any medical treatments you receive during the waiting period. 

As an example, the waiting period with Real Health Insurance will vary depending on the service being provided.

Standard Hospital waiting periods include:

• 1 day for emergency ambulance cover 
• 1 day waiting periods for the accidental injury benefit
• 12-months for pregnancy and birth-related services 
• 12-months for any pre-existing conditions
• 2-months for all other services requiring hospitalisation (except those listed above) that aren’t Pre-Existing Conditions.
• 2-months for Hospital psychiatric services, rehabilitation or palliative care

According to the Australian Government's Department of Health and Aged Care, insurers can apply any waiting period for extras cover. As an example, with Real Health Insurance, our waiting periods for Extras vary from 2-months for general dental and 36-months for hearing aids.

As each insurance provider and policy are different, be sure to check your Private Health Insurance Statement (PHIS) for the services you are covered for and learn more about the waiting periods that apply specifically to you.

Did you know: With many health insurance providers, including Real Insurance, no waiting period applies to Veteran Gold Card holders including when a member joins within two months of ceasing entitlements to a Veteran Gold Card, that member won’t have to serve any waiting periods for hospital or general treatment.  

Waiting periods when switching funds or changing products

If you switch from one insurance provider to another, the waiting period you have already served is recognised on the date of the transfer, as long as there isn’t a gap of more than 59 days between terminating your previous cover and starting your new policy. Refer to the Private Health Insurance Ombudsman for more information.

The same applies if you change products. On the new product, waiting periods will apply only to services with higher benefits, services not previously covered, or if you hadn’t fully served your previous waiting period – you will still have to serve the balance remaining. 

If you have already claimed some or all your benefits for the year as part of your previous cover, then the new benefits will be adjusted accordingly. For example, if you have extras cover, and have already claimed the annual limit of your physio/chiro/osteo or remedial massage – then you won’t be able to claim it again for that year.   

Be sure to refer to your policy document for accurate information that’s unique to your policy.

Waiting periods when splitting a policy

Waiting period would depend on your insurance provider. As an example with Real Health Insurance, If you are on a couple or family policy, but want to change to a single policy  , then you can do so without having to re-serve  waiting periods for the same level of cover. The same goes for a child or dependant, student dependant, non-student dependant or a non-classified dependant – they can all take out their own policy and take advantage of not having to re-serve a waiting period on their new policy. 

To do this, you typically have to take out your policy within 30 days of leaving your previous cover. Another thing to keep in mind is that if the waiting period was not fully served on the previous cover, then the remaining portion will still apply. Also, if you decide to upgrade your cover, there may be additional waiting periods that apply.

Waiting period for pre-existing medical conditions

If you have an existing health condition when you take out private hospital cover, you will incur a 12-month wait on hospital services that are relevant to that condition, as this is what is deemed as a pre-existing condition.   Again, the reason for this is that it helps to stop people from making a claim and then cancelling their cover right way. Without such waiting periods, there’d be higher premiums for everyone.

The pre-existing condition waiting period also applies when changing products but only to the services that weren’t previously covered. If you need hospital treatment after the first two months but before the first 12 months of having your insurance, then you’ll have to get a referral from your doctor to see a specialist. The specialist treating you will have to fill out relevant paperwork for your insurer’s medical practitioner to review. Your insurer’s medical practitioner will get the final say on whether a condition is pre-existing or not.    

It's important to note that the maximum hospital waiting periods for pre-existing medical conditions is 12 months in Australia as per the Private Health Insurance Act 2007.  

Waiting period for mental health hospital treatment

There is generally a two-month waiting period for new members to access hospital psychiatric services. However, a mental health waiver can allow you to upgrade your hospital cover and waive this waiting period if you have:

• held Hospital Cover for at least the previous 2 months
• not previously used this waiver with your current or previous insurer
• been admitted to hospital and receiving ongoing care from an addiction medical specialist or a consultant psychiatrist  

Is there health insurance without a waiting period?

It’s important to note that a waiting period for Hospital cover can’t be waived in any instance. But, for Extras cover, there may be opportunities to have some waiting periods waived as a part of promotional joining offers. Ensure you read the terms and conditions of these offers to check your eligibility.

Waiting to see if health insurance is right for you?

Private health insurance can offer peace of mind that you’ll be covered for certain health-related costs and medical expenses, should life throw a curveball your way. 

Also, the Australian government encourages people to take out hospital cover before 1 July following their 31st birthday under their Lifetime Health Cover initiative – otherwise, you’ll have to pay an extra 2% on insurance premiums each year that you don’t have private hospital cover. You’ll have to pay the loading for 10 consecutive years before it stops, and the maximum loading is 70% – this means you could end up paying thousands of extra dollars when you eventually take out private hospital cover.

Consider if Real Health Insurance may be suitable for you and get a quote today.