Health Insurance Explained

All your questions answered in plain English

We understand health cover can be a little confusing, so we’ve put together a list of some of the most common questions we get asked.

A key concern for consumers was the complexity and difficulty of understanding and comparing private health insurance products.

Before the reforms, health funds usually name the hospital benefit category themselves, for example: Heart and Artery related services, Heart conditions, Cardiac Procedures, Cardiac and Cardiac related procedures. This created confusion for consumer as the scope of treatment and benefits paid varied from health fund to health fund.

This is the reason why a standard set of clinical categories has been introduced to define what different products do and do not cover, helping consumers make an informed choice about private health insurance.

From 1 April 2019, all health funds are required to use the standard clinical categories to inform customers of treatments and services included in their hospital insurance policy, making it easier to understand what different products do and do not cover.

A clinical category is defined as a group of hospital treatments/services that must be covered by a Medicare Benefit Schedule (MBS) item number. This means that if the category is covered, all health funds must cover the same treatments/services for each clinical category.

This will eliminate the confusion of the treatments covered under each product available in the market making it easier to compare and choose the cover that’s right for you.

View table of Clinical categories

Starting 1 April 2019 hospital policies will be categorised into tiers with minimum requirements of cover for each level of cover: Gold, Silver, Bronze and Basic.

Hospital products must now cover certain standard clinical categories depending on the tier it fits into. The higher the tier, the more it must cover.

If a clinical category is covered under a tier, then a health insurer must ensure that all MBS items of the category are covered. Policy names must include the tier category to easily identify the tier.

In addition, an insurer may use the word ‘Plus’ (or symbol ‘+)’ e.g. ‘Silver Plus’ to indicate that the policy covers the minimum clinical categories for a Silver tier hospital product, but it has some additional inclusions.

The new product tiers will give consumers greater certainty about the services covered by each type of hospital treatment product

View list of clinical categories by Hospital Product Tier

Following a review chaired by the former Commonwealth Chief Medical Officer, some natural therapies will be excluded from the definition of private health insurance general treatment, as there is no clear evidence demonstrating their efficacy.

From 1 April 2019 private health insurers will no longer be able to pay benefits for the excluded natural therapies services.

    Not covered from 1 April 2019

  • Alexander technique
  • Aromatherapy
  • Bowen therapy
  • Buteyko
  • Feldenkrais
  • Herbalism
  • Homeopathy
  • Iridology
  • Kinesiology
  • Naturopathy
  • Pilates
  • Reflexology
  • Rolfing
  • Shiatsu
  • Tai chi and yoga

CUA Health will continue to pay for those services that are still approved by the government and that are popular with our members. These include acupuncture, remedial massage and a newly introduced benefit for Chinese Herbal Medicine.

In the case where health professionals provide excluded natural therapies as an element of other treatment, health insurers may pay benefits if the services provided are within the accepted scope of clinical practice. For example, a physiotherapist providing pilates services.

For additional information on eligibility of services please visit the Department of Health.

Consumers are concerned with the premium increases and affordability. To assist with this, insurers will be able to increase the permitted excesses for private hospital insurance.

Maximum excess levels allowable by the government, will increase from $500 to $750 for singles and from $1000 to $1500 for couples/families.

CUA Health will introduce new excess levels on 4 of our hospital products whilst keeping our existing levels. Offering members the opportunity to choose a higher excess in return for lower premiums.

Health insurers now have the option to offer Australians aged 18-29 years of age a discount of up to 10% on their private hospital insurance premiums.

CUA Health understands affordability is a major factor in many young Australians being able to take out private hospital cover – so we are adopting hospital health cover discounts of up to 2% for every year a member is under 30 years of age, and up to 10% for 18-25 year old.

The youth discount does not apply to extras products.

For CUA Health members, the discount will automatically apply If:

  1. A member chooses (or already has on 1 April 2019) a hospital product that is eligible for discounts; and
  2. Is of eligible age (18-29),

The rate of discounts depends upon;

  • The age the person locked in their discount when they first received discount (if switching)
  • The age that they joined a hospital product on CUA Health that offers a youth discount.
  • The age the person on an eligible product, on the day the insurer first offered discount (E.g. 1 April For CUA health members)
Person's age when they first purchase a hospital product offering discounts Applicable discount
18-25 10%
26 8%
27 6%
28 4%
29 2%
30 0%

Once a policy holder has aa youth discount they will retain that discount rate until they turn 41 if they remain on a policy that is eligible for the discount.

If, for that period, the person is aged: Applicable discount
18 or older, but under 41 Person's base percentage
41 Person's base percentage minus 2%
42 Person's base percentage minus 4%
43 Person's base percentage minus 6%
44 Person's base percentage minus 8%
45 or older Zero

When more than one adult is eligible on the policy, the average rate between the two will apply.

We’ll notify all our members of their individual policy and premium changes in mid-February 2019. This will include a cover letter, a product change sheet and a Private Health Information Statement (PHIS).

This is an important opportunity for you to review your health cover, making sure you consider your personal health situation or any changing personal circumstances. This will provide a period to consider your current health insurance cover and to make any changes ahead of the 1 April 2019 effective date, if needed.

If you’d like to review or discuss your options, we would welcome the opportunity to discuss this with you. You can contact us Mon – Fri: 7.30am – 5:00pm (AEST) on 1300 499 260.

The Private Health Insurance Ombudsman (PHIO) website privatehealth.gov.au will be redeveloped to better assist consumers in comparing different health insurance products.

As a result, the current Standard Information Statement (SIS) will be replaced by a Private Health Information Statement (PHIS) as the regulated method by which insurers provide information to consumers.

Private Health insurance helps reduce or eliminate your out of pocket expenses for medical treatment in or outside of hospital, while giving you wider access to health care professionals.

While Medicare covers you for treatment in a public hospital, private hospital cover lets you choose when and where you are treated and the doctor you see. Extras cover also helps reduce the cost for many services not covered by Medicare like dental, optical and physio.

What if I decide not to get private health insurance? Show content

If you don’t have Hospital cover, you can still be treated by the public health care system in the event you need to go to hospital. If you require surgery, you will be placed on a waiting list.

It’s important to note, if you’re over 31 years old or earn more than $90,000 p.a. as a single or $180,000 as a couple, you may have to pay the Medicare Levy Surcharge or Lifetime Health Cover loading if you don’t have Private Hospital Cover and decide to take it later in life. Find out more on saving tax.

What is the Australian Government Rebate on Private Health Insurance? Show content

The Australian Government offers a rebate to help cover the cost of your private health insurance premium and can be claimed on both Extras and Hospital cover. The amount of rebate you might receive is calculated based on your income. CUA Health can apply your rebate directly to your health cover policy to reduce the amount of your premium or you can claim your rebate at tax time.

Do I qualify for the Private Health Insurance Rebate? Show content

If you’re eligible to Medicare benefits then you qualify to receive the rebate, it varies depending on your income.

Here you can find the rebate levels applicable.

The Medicare Levy Surcharge is an additional tax charged to people who earn more than the specified threshold and don’t have Private Hospital cover. All CUA Health Hospital Cover policies satisfy the Government criteria to avoid the surcharge (to avoid the tax, you only need Hospital cover, not Extras cover).

Does the Medicare Levy Surcharge apply to me? Show content

The Medicare Levy Surcharge will apply to you if you earn over $90,000 a year as a single, or $180,000 as a couple or family and don’t have Private Hospital Cover. The surcharge varies from 1% to 1.5% depending on your income.

What is the Lifetime Health Cover loading? Show content

‘Lifetime Health Cover’ is a Government initiative designed to encourage people to take out private hospital insurance earlier in life and maintain their cover.

People who delay taking out cover will pay a 2% loading on top of their premium for every year they’re aged over 30 when they first take out private hospital cover and the loading applies for 10 years. For example, if you took out private hospital cover for the first time at the age of 40, you would have an additional 20% on your premium every year for 10 years.

I’m turning 31, what should I do? Show content

‘Lifetime Health Cover’ is a Government initiative designed to encourage people to take out private hospital insurance earlier in life and maintain their cover.

People who delay taking out cover will pay a 2% loading on top of their premium for every year they’re aged over 30 when they first take out private hospital cover and the loading applies for 10 years. For example, if you took out private hospital cover for the first time at the age of 40, you would have an additional 20% on your premium every year for 10 years.

Hospital and Doctor’s gap Show content

What is a ‘gap’? Show content

A gap is the amount of the medical bill that remains to be paid by the patient after Medicare and/or private health funds have paid their share.

All of CUA Health Hospital Cover options include ‘gap cover’, which means that if your doctor and hospital agree to treat you on the ‘Access Gap Cover Scheme’ you will have little to no gap to pay.

It’s always a good idea to ask your doctor or medical provider for an estimate of any out of pocket expenses you may incur, particularly if you’re having surgery.

Switching to CUA Health is very easy. After you’ve chosen your cover options, you’ll be asked to provide your current health insurance policy details in the joining form. We’ll then contact them directly to cancel your policy and to transfer over any waiting periods you’ve served. Simple!

If you’re aware of a medical condition you already have, you can still take out health cover with CUA Health. You will have to wait 12 months before you will be covered for treatment relating to your pre-existing medical condition unless this waiting period was served with another provider.

What are waiting periods and how do they work? Show content

A waiting period is the amount of time you must wait between taking out a policy and being able to claim. If you’re transferring from another provider to an equivalent level of cover with CUA Health and you served the waiting period with your previous provider, you will not have to reserve your waiting period.

If you’re upgrading your level of cover from either another provider or from a lower CUA Health policy, you’ll be covered at the previous level until your waiting period has been served.

We also take into account and apply any partial waiting periods served with other providers.

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