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Private Health Insurance for Mental Health

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Anneke Van Aswegen Updated: 11 May 2020
Types of Health Insurance

If you’re considering mental health support, because of stress, depression, grief or addiction, then a private health insurance policy providing coverage for psychological and psychiatric services might be beneficial. With 1 in 5 Australians experiencing a mental illness sometime in their lives, appropriate insurance to help pay for these expenses are essential.

Mental health insurance can help cover the cost of mental health care treatments and services, thus reducing out-of-pocket expenses. Generally, a Hospital policy will provide coverage for in-hospital psychiatric treatment or drug and alcohol rehabilitation, while an Extras policy usually pays for counselling and therapy received outside of the hospital.

The benefit and amount you can claim depend on the type of private health insurance policy and the level of coverage you purchase.

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How much do mental health services cost in Australia?

Mental health care is expensive. According to the Australian Institute of Health and Welfare, $9.1 billion was spent on mental health services between 2016 and 2017.

Psychologist fees vary and can range from $60 to $150 per session, depending on the health professional’s qualifications, duration of the consult, the state you live in and whether treatment is for an individual or couple. For accommodation in a psychiatric or rehabilitation facility, you could be quoted upwards of $700 per night.

The amount that your health fund will pay depends on the kind of policy and the level of cover that you have.

Does Medicare cover mental health care?

A rebate is generally available for up to 6 sessions, with about $83 per session for a Registered Psychologist and $124 per session for a Clinical Psychologist or Psychiatrist. However, your GP generally must provide you with a Mental Health Plan before you can get a Medicare rebate.

A Mental Health Plan usually consists of your doctor completing a detailed questionnaire regarding your history, symptoms and unique circumstances.

What does private health insurance cover for mental illness?

Generally, private health funds pay for mental health treatments and services received by a mental health professional in and outside of the hospital, depending on your policy type and level of coverage. Psychology services are generally provided as part of your Extras cover, while treatment in a psychiatric or rehabilitation facility, is covered by your private Hospital policy.

Psychiatric and drug and alcohol rehabilitation services

If you have a Hospital policy, you’ll typically be covered for hospital admittance for the treatment of mental health issues, including:

Generally, your health fund will pay for your accommodation and a portion of your medical fees, depending on your level of cover.

Some Hospital plans might only provide restrictive cover, meaning you’ll only be partially covered. It’s vital that you review the policy’s Standard Information Statement (SIS) before purchasing a policy.

Take note: You’ll usually have to serve a 2-month waiting period after your policy commences before you can claim on this benefit. However, waiting periods vary from fund to fund.

Psychological services

Some Extras policies provide a benefit for psychology services and counselling. Your health fund will generally pay a benefit amount specific to your annual limit or percentage. Benefit limits vary according to the type of Extras you’ve purchased: Basic, Mid or Comprehensive.

Regardless of your level of coverage, you typically have to wait 2 months after your policy starts before you can claim on the psychology benefit.

Private health insurance mental health reform

From April 2018, all private Hospital policyholders with restricted psychiatric cover can upgrade to a higher policy without having to serve the usual 2-month waiting period. Also, benefit limitation periods that were also sometimes applied was removed.

Since April 2019, all private Hospital policies must at least provide partial (restrictive) cover for hospital psychiatric services.

What is the best insurance for mental health?

The best health insurance for mental illness or substance abuse problems is one that suits your unique requirements. However, if you want full hospital psychiatric coverage and psychology benefits, you generally need to purchase a Gold Hospital policy combined with comprehensive Extras cover.

Health funds that cover psychiatric and psychological services

Health Fund Hospital and Extras plan Mental health services
Bupa Ultimate Health Cover
  • Full cover for hospital psychiatric services
  • $1,000 annual limit per policy for psychology. Sub-limits apply.
CBHS Gold Premium Package
  • Full cover for hospital psychiatric services
  • $500 annual limit per policy for psychology.
Medibank Gold Ultra Health Cover
  • Comprehensive cover for hospital psychiatric services
  • $600 annual limit per policy for psychology
myOwn Gold Hospital and Top 70 Extras
  • Full cover for hospital psychiatric services
  • $400 yearly limit per policy for psychology
Nib Gold Top Cover
  • Comprehensive cover for hospital psychiatric services
  • $300 annual limit per policy for psychology
Peoplecare Gold Hospital & Premium Extras
  • Full cover for hospital psychiatric services
  • $500 yearly limit per policy for psychology

Source: privatehealth.gov.au (June 2019)

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How to find private health insurance for mental health coverage

To find a private health insurance policy that will provide you with suitable mental health coverage, you might want to gather quotes from a variety of funds and make a mental health insurance comparison based on:

  • Co-payment fees: Get clarity of what you’ll have to pay out-of-pocket when being admitted to hospital for psychiatric or addiction treatment.
  • Their Standard Information Statement (SIS) to determine the waiting periods and exclusions that may apply. Be sure also to check your benefit limits and whether re-admission to a hospital within days of a previous hospital stay is covered.
  • Mental health providers: Your health fund might specify which facilities and/or mental health care practitioners you need to get your services from to receive a benefit.

What are the top mental health facilities in Australia?

When you need to be admitted to a psychiatric hospital, make sure you know what your fund will cover so that you can focus on recovery and not stress about out-of-pocket costs.

Some of the psychiatric hospitals in Australia include

State Psychiatric hospitals
New South Wales
  • South Coast Private Mental Hospital
  • Morisset Hospital
  • St John of God Richmond Hospital
  • Gladesville Mental Hospital
Queensland
  • Currumbin Clinic
  • Toowong Private Hospital
  • Belmont Private Hospital
Victoria
  • Delmont Private Hospital
  • Albert Road Clinic
  • Thomas Embling Hospital
South Territory
  • Glenside Health Services
  • Northern Community Mental Health Services
  • Centre for Treatment of Anxiety and Depression
ACT
  • Calvary Bruce Private Hospital
  • Dhulwa Mental
Western Australia
  • Graylands Hospital
  • Abbotsford Private Hospital
Northern Territory
  • Tamarind Centre
Tasmania
  • The Hobart Clinic
  • Child and Adolescent Mental Health Services

Frequently asked questions

  • Are mental health retreats covered by insurance?

    Whether mental health retreats will be paid for by your health fund depends on your GP providing a Mental Health Treatment Plan that shows such a retreat to be beneficial to your mental health. Your choice of health fund and the type and level of coverage you purchase will also determine whether a retreat will be partially or fully paid.

    If you think that there’s a chance you might need accommodation at a psychiatric hospital or retreat, you should contact your health fund, general practitioner, and the facility you’re thinking of staying at to check which costs are covered and how much you might have to pay out of pocket.
  • Do you need a referral to see a psychologist?

    You can make an appointment with a psychologist without a referral from your GP. However, if you do see a psychologist without your GP providing you with a Mental Health Treatment Plan, then a Medicare rebate will generally not be provided, and you’ll be responsible for paying the full amount.
  • How to determine if my insurance covers therapy

    If you already have health insurance and want to find out if treatment is covered, then review your policy documents and the policy’s Standard Information Statement (SIS). These documents will show whether you’re covered for therapy sessions, under which circumstances a claim will be valid and your benefit limit.
  • Can you get a private health insurance rebate for psychology?

    If you have an Extras policy that includes a psychology benefit and sessions are with a clinical or registered psychologist, you could qualify for a private health insurance rebate. You’ll also need a Mental Health Care Plan, where your doctor has assessed whether you’re likely to benefit from such mental health support.

    Be sure to check with your psychologist if treatment with them qualifies for a full or partial rebate from your health fund.
  • Does health insurance cover counselling?

    Counselling is usually covered by private health insurance, under your Extras policy. However, this varies from fund to fund, with many only providing a psychology benefit under their top Extras policies. Be sure to review your policy documents to determine if you can claim a benefit and what your annual or percentage limit is.

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  • Reduce out-of-pocket expenses
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