Why you need insurance?

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Why you need insurance? (Why do you need insurance?)


Australia enjoys some of the best health standards in the world. Hospital or GP visits can be expensive, and we do not want you to be out of pocket! Therefore, insurance is an important part of your stay in Australia because the health cost here can be so expensive. For some visa, it is also mandatory to be covered by insurance, so you need to comply with the regulation to get your visa granted.


Find out what are the benefits of insurance where you should get cover that provides at least equivalent to the following:

Public hospital

For admitted patient treatment, a benefit equal to the state and territory health authority gazette rates for ineligible patients for:

  • overnight and day only hospital accommodation (all costs including: all theatre, intensive care, labor wards, ward drugs)
  • emergency department fees that lead to an admission
  • admitted patient care and postoperative services that are a continuation of care associated with an early discharge from hospital

This includes all admitted treatments covered by the Medicare Benefit Schedule (MBS).


Surgically implanted prostheses

For no-gap prostheses and gap-permitted prostheses as listed in the Private Health Insurance (Prostheses) Rules 2007, a benefit at least equal to 100 per cent of the minimum benefit amount listed.



For all PBS-listed drugs, prescribed according to PBS-approved indications, that are administered during and form part of an admitted episode of care, a benefit equal to the PBS-listed price more than the patient contribution.

This includes the cost of PBS-listed drugs administered post-discharge if they form part of the admitted episode of care.


Medical services

For admitted medical services with an MBS item number, 100 per cent of the Medical Benefits Schedule fee or less if the patient is charged less.


Ambulance services

100 per cent of the charge not otherwise covered by third-party arrangements for transport by ambulance provided by, or under an arrangement with, a government-approved ambulance service when medically necessary for admission to hospital, emergency treatment onsite, or inter-hospital transfer for emergency treatment.

This includes inter-hospital transfers that are necessary because the original admitting hospital does not have the required clinical facilities. It does not extend to transfers due to patient preferences.


Informed financial consent

The insurer will allow hospitals to check members’ eligibility, so members are able to give informed financial consent when they are admitted.


Waiting periods

To comply with the minimum level, the only waiting periods that can be applied are:

  • 12 months for pregnancy related conditions12 months for pre-existing conditions applied in a way that is consistent with Section 75-15 of the Private Health Insurance Act 2007
  • 2 months for psychiatric, rehabilitation and palliative care, whether the condition is pre-existing


Excluded treatments

To comply with the minimum level of health insurance, the only admitted patient treatments that may be excluded are:

  • assisted reproductive treatments
  • elective cosmetic treatments
  • stem cells, bone marrow and organ transplant

Insurance policies may also exclude:

  • treatment provided outside Australia, including necessary treatment en route to or from Australia
  • treatment arranged in advance of the insured’s arrival in Australia
  • services and treatment which are covered by compensation or damages provisions of any kind

Insurers don’t have to exclude these treatments. They can choose to cover them or not.


Global annual benefit limits

To comply with the minimum level of health insurance, the per-person, per-annum benefit must not be less than AUD1,000,000.


Out-of-hospital cover

For treatment that relates to medical services with an MBS item number, cover up to the Medical Benefits Schedule fee.

Except where otherwise stated, the insurer can decide whether to provide cover for out-of-hospital treatment. The insured person can choose to purchase this additional cover or not.


Excess, co-payment, or patient contribution

The insurer can decide to charge an excess, co-payment, or patient contribution. Excess, co-payment and patient contributions can be charged on either an annual or per-separation basis.



When determining waiting periods, insurers must recognise previous length of membership on a policy held with another Australian insurer that meets the minimum standards.

That is:

  • when transferring between Australia-based insurers where the customer has been a member of the previous fund for more than 12 months, waiting periods of no longer than 12 months will apply to the higher level of benefits
  • when transferring between Australia-based insurers where the customer has been a member of the previous fund for less than 12 months, any unserved waiting periods must be completed with the new fund. If increasing the level of cover or benefits, further waiting periods of no longer than 12 months will apply to the higher level of benefits. These waiting periods are to be served concurrently

To comply with the minimum level of health insurance, the insurer must agree to:

  • grant a member who transfers between Australia-based insurers continuity of cover for up to 30 days from the date they leave their previous insurer
  • provide members who terminate their policy with a clearance certificate, approved by the Department of Home Affairs, within 14 days of the termination date or the date they were notified of the termination, whichever is later


Buy-out clauses

To comply with the minimum level of health insurance, a policy must not contain a buy-out clause that would have the effect of terminating the insurer’s liabilities in exchange for a predetermined lump sum payment.



The insurer will allow the insured person 60 days from the last financial date of membership to pay a premium without terminating the membership. Insurers do not have to pay for treatment received during any arrears period until and unless the arrears are paid for the relevant period.

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