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Waiting Periods in Health Insurance
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NIBWhen starting a new private health insurance policy or upgrading cover, most providers require you to wait a certain amount of time before claiming benefits; this is called a waiting period. Generally, there are different waiting periods for various treatments, so it’s important that you know what to expect before applying or upgrading your policy. Understanding these waiting periods helps you avoid paying out of pocket for treatments.
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What are waiting periods, and how do they work?
Private health insurance policies have specific waiting periods that apply when you take out a new policy or increase your cover level. These waiting periods refer to the length of time you’ll need to wait before you can claim benefits for specific health services and treatments.
In the Private Health Insurance Act 2007, the Federal Government set maximum waiting periods that insurers can prescribe to all coverage. However, waiting periods are usually fixed by your insurer and apply to both Hospital and Extras cover. Usually, there are different waiting periods associated with specific treatments or procedures.
Hospital insurance waiting periods
- Pre-existing conditions: 12 months
- Pregnancy and birth (obstetrics): 12 months
- Psychiatric treatments, rehabilitation, and palliative care, even if pre-existing: 2 months
- All other circumstances: 2 months
General waiting periods for Extras (general treatments)
- General dental: 2 months
- Physiotherapy: 2 months
- Optical: 6 months
- Major dental: 12 months
- High-cost procedures such as orthodontics: 1,2 or 3 years, depending on your insurer
- Hearing aids: 12 months
Why do health insurers have waiting periods?
Waiting periods are generally put in place to protect health insurers and their members from individuals who could take advantage of the system. These individuals might make a large claim soon after joining or upgrading their cover and then cancel their policies after receiving the benefit. This could lead to increased premiums for all policyholders as insurer’s need- to offset these pay-outs.
Can you get health insurance with no waiting periods?
Generally, no, waiting periods are standard for all private health insurance policies in Australia. However, there are some instances where waiting periods might be waived.
For example, if you change policies or insurers while retaining the same type and level coverage, or if you switch to a lower level of cover, you generally won’t be required to re-serve the waiting periods you’ve already completed.
Can health funds waive waiting periods?
Generally, there are set waiting periods for Hospital and Extras cover. However, some health funds may waive specific waiting periods to attract new members as part of a promotion. Additionally, insurers could also shorten or waive the waiting period in certain circumstances, for instance, in the event of an accident.
It’s important to note that lengthier twelve-month waiting periods for pre-existing conditions, obstetrics, and major dental treatments are rarely waived. To avoid out-of-pocket costs, always check with your health fund regarding waiting periods before scheduling a procedure.
Who is exempt from the waiting periods?
Policyholders are generally only exempt from serving health insurance waiting periods for mental health cover. A mental health waiting period exemption applies when upgrading your Hospital cover to include psychiatric care.
These additional benefits from your upgraded psychiatric cover are available immediately if you have already completed the 2-month waiting period for limited psychiatric services. However, you’ll only be able to use this exemption once in your lifetime.
The once-off exemption is there to use at your discretion. You may decide to use the exemption to claim higher psychiatric benefits for the treatment or not make use of the exemption and claim the lower benefits you were entitled to before upgrading your cover. If you don’t use your exemption and only claim lower benefits within two months of upgrading your policy, the exemption is still available to you to use at a later stage in your life.
Waiting periods for members upgrading cover or switching insurers
Suppose you’ve already completed waiting periods for your Hospital cover. In that case, you won’t need to re-serve these waiting periods when moving from one health insurer to another and taking out a similar level cover.
However, if you upgrade your cover level and/or include more benefits, you’ll need to complete the waiting periods for those specific increases and additions.
Take note: Loyalty options and accrued benefits don’t necessarily transfer between insurers.
Frequently asked questions
Is it possible to use your health insurance immediately?
Generally, no, you’ll need to complete all waiting periods before making use of your health insurance cover. However, if you’ve changed your insurer and purchased a similar policy and level of coverage, without a break in coverage, and you’ve already served the applicable waiting periods, you’ll usually be covered immediately.On the other hand, if you’ve upgraded or added to your existing Hospital or Extras cover, waiting periods will apply to those additional or upgraded items.
What is the waiting period for dental insurance?
General dental coverage usually comes with a 2-month waiting period while major dental procedures such as crowns or bridges, requires you to serve a 12-month waiting period. Costly procedures such as orthodontics may have a 1, 2 or even 3 year waiting period depending on the insurer.Why is there a waiting period for pre-existing conditions?
Waiting periods for pre-existing conditions prevent people from taking cover or upgrading their existing coverage, making a claim and then cancelling their policy before paying any premiums. Without waiting periods, health fund members who stay up to date on their payments end up covering the cost of those that claim and leave, which results in higher fees for all members.How long is the waiting period for pre-existing conditions in health insurance?
As a new Hospital policyholder, you won’t be entitled to any benefits for a pre-existing condition in the first 12 months of membership. If you’ve upgraded the level of cover on your Hospital policy, you’ll receive the lower benefits that you had on your previous level of cover for the first 12 months. After you’ve completed the waiting period on your new policy, you’ll be entitled to the upgraded benefits.What are the waiting periods for psychiatric and rehabilitative care?
For new Hospital policyholders, a 2-month waiting period generally applies for all psychiatric and rehabilitative care. If you’re upgrading your existing hospital cover for psychiatric care, you might qualify for a mental health waiting period exemption. Additional benefits are available immediately on condition that you’ve already completed the 2-month waiting period for limited psychiatric services.Which health funds offer the shortest waiting periods?
Generally, private health insurers need to adhere to the set waiting periods as defined by the Australian Government. However, the length of waiting periods depends on the fund you’re with and the policy you’ve selected. Therefore, it’s best to compare health funds and policies to find the shortest waiting periods for the cover you need.Can you appeal a health insurance waiting period?
Health insurance waiting periods are generally not grounds for appeal unless there has been an error relating to a change in your policy which has led to a waiting period. It’s best to clarify waiting periods with your insurer when starting a new health insurance policy or making changes to an existing one.What happens to my waiting periods if I suspend my policy?
If you choose to suspend your health insurance policy, any applicable incomplete waiting periods are deferred. Meaning, i you decide to resume your cover, you’ll need to serve the remainder of your waiting periods before making any claims.Can overseas visitors get health insurance with no waiting period?
No, overseas visitors are not exempt from waiting periods for their health insurance. As with all cover, waiting periods vary depending on the chosen insurer. Typically, waiting periods start on the day visitors arrive in the country. If you’re already in the country, waiting periods begin on the day the policy is activated.
