TAKE CARE OF YOUR CURRENT AND FUTURE HEALTH WITH BASIC HEALTH INSURANCE.
Are you unsure if Basic hospital insurance is enough, or if you should consider upgrading to Bronze, Silver, or Gold tiers? Or maybe you’re new to health insurance and want to determine if basic hospital insurance is right for you.
In this comprehensive guide, we'll take you on a journey through everything you need to know about Basic health insurance in Australia.
We'll break it down in an easy-to-understand manner so you can make an informed decision.
From the different hospital cover tiers to waiting periods, out-of-pocket expenses, and who will benefit most from basic health insurance, we’ve got you covered. So let’s dive in!
What is Basic Health Insurance?
Basic health insurance serves as the entry-level option when it comes to hospital cover. Basic health insurance policies come with limited features and certain exclusions.
However, they do provide essential coverage for hospital psychiatric services, rehabilitation, and palliative care as a private patient in a public hospital.
It's important to note that the coverage under Basic health insurance is quite restricted. If you're seeking more comprehensive coverage across a broader range of services without incurring hefty premiums, it would be worthwhile to consider comparing Basic plus and Bronze tiered policies.
Our free comparison tool above can assist you in finding the right policy that aligns with your requirements and budget.
What Does Basic Health Insurance Cover?
Basic health insurance policies will include (at a minimum)restricted hospital cover for the following three clinical categories:
Hospital psychiatric services: Basic health insurance includes hospital treatment and care for individuals with psychiatric, mental, addiction, or behavioural disorders. This covers a wide range of conditions such as schizophrenia, depression, eating disorders, and addiction therapy.
Rehabilitation: Basic health insurance offers hospital treatment for physical rehabilitation after surgery or illness. This includes both inpatient and day patient rehabilitation services. Examples of rehabilitation programs covered under Basic health insurance are stroke recovery and cardiac rehabilitation.
Palliative care: Basic health insurance provides hospital treatment for quality-of-life care for patients with terminal illnesses. This includes treatments aimed at alleviating and managing pain for individuals in palliative care.
Bonus cover: ambulance cover (in some states) – In certain states, Basic level hospital policies may also include ambulance cover. This means that if your state government does not already provide coverage for emergency ambulance services, your Basic health insurance policy can contribute towards the costs.
What Isn’t Covered Under Basic Health Insurance?
When you break it down, there are more things not covered under basic health insurance than what is covered. Here’s a list of what you’re not typically covered for:
- Brain and nervous system
- Bone, joint and muscle
- Breast surgery
- Chemotherapy, radiotherapy and immunotherapy for cancer
- Diabetes management (excluding insulin pumps)
- Digestive system
- Ear, nose and throat
- Eye (not cataracts)
- Gastrointestinal endoscopy
- Gynaecology
- Hernia and appendix
- Joint reconstructions
- Kidney and bladder
- Male reproductive system
- Miscarriage and termination of pregnancy
- Pain management
- Skin
- Tonsils, adenoids and grommets
- Back, neck and spine
- Blood
- Dental surgery
- Heart and vascular system
- Implantation of hearing devices
- Lung and chest
- Medically necessary plastic and reconstructive surgery
- Podiatric surgery provided by a registered podiatric surgeon
- Assisted reproductive services
- Cataracts
- Dialysis for chronic kidney failure
- Insulin pumps
- Joint replacements
- Pain management devices
- Pregnancy and birth|
- Sleep studies
- Weight loss surgery
Does Basic Health Insurance Give Me Extras Cover Too?
In the world of health funds and insurance, you typically have three types of cover:
- Hospital cover
- Extras cover
- Combined hospital and extras cover
Most people either take out combined hospital and extras cover, or just extras cover. So, if you’ve taken out bronze health insurance, it’s likely you’ll have some kind of extras to cover health care too. However, it’s important to check with your health insurance provider because what you’re covered for will differ from policy to policy, health fund to health fund and so on.
What Does Basic Health Insurance Cost?
The price of a Basic health insurance plan will vary depending on your state, the health fund you choose, and the coverage included in your policy. Generally, Basic health insurance policies are more affordable compared to higher tiers such as Bronze, Silver, or Gold health insurance, mainly because they offer limited coverage for hospital treatments.
However, it's important to note that Basic Plus hospital policies may come with a higher price tag than higher tiers.
To get an idea of how much a Basic health insurance plan might cost you, a convenient approach is to compare different policies online.
This allows you to easily compare prices and coverage options to find the best fit for your needs and budget.
Pros & Cons of Basic Health Insurance
Pros:
- Affordable coverage that avoids Medicare Levy Surcharge and Lifetime Health Cover loading.
- Various 'Basic plus' policies offer cost-effective access to select Bronze-tier treatments.
- Ambulance coverage is typically included in most Basic policies, but it's important to review the policy specifics.
Cons:
- Limited coverage for rehabilitation, hospital psychiatric services, and palliative care.
- Most Basic policies exclude treatment in private hospitals, but provide coverage as a private patient in a public hospital.
- Excludes common treatments such as ear, nose and throat, bone, joint and muscle, and joint reconstructions.
Who Should Consider Basic Health Insurance?
A Basic tier policy is ideal for individuals who primarily seek hospital cover to avoid the Medicare Levy Surcharge (MLS) or Lifetime Health Cover loading (LHC). This type of policy is suitable for those who are comfortable relying on Medicare, Australia's universal health care system, for their hospital care.
It particularly caters to higher income earners who prioritize meeting the MLS or LHC requirements while relying on the public health care system for their medical needs.
Basic Health Insurance Vs Other Tiers
When it comes to the range of hospital treatments covered, Basic health insurance offers the least coverage compared to higher tiers in Australia.
A standard Basic policy provides restricted private hospital cover for only three out of 38 clinical categories. This means it covers 18 fewer categories than the Bronze tier and 26 fewer than the Silver tier. On the other hand, Gold tier policies provide coverage for all 38 clinical categories.
If you're looking for more extensive coverage but prefer not to opt for a higher tier policy, you might be able to find a health fund that offers the specific treatments you need under their Basic Plus policy. This allows you to have additional coverage beyond the minimum requirements of a Basic policy without having to upgrade to a higher tier.
What is a Basic Plus Policy?
Some health funds have the option to offer Basic Plus or + policies, which provide more coverage than a standard Basic health cover policy. With Basic Plus policies, you can have additional restricted or unrestricted Basic hospital cover for one or more of the 35 clinical categories typically associated with higher-tiered policies.
It's important to note that Basic Plus policies may come with a higher cost compared to standard Basic policies.
Therefore, depending on your specific health insurance needs, it may be more beneficial to consider a Bronze tier policy.
In certain situations, a Bronze tier policy could provide better value for money than a Basic Plus policy. It's worth exploring your options and considering what suits you best.
Is Basic Health Insurance Worth It?
Basic level health insurance policies in Australia serve as the most basic form of hospital cover provided by insurance funds. Opting for Basic health insurance may be beneficial if:
- You are specifically seeking the lowest level of coverage available with minimal benefits.
- Your primary goal is to avoid paying the Medicare Levy Surcharge (MLS) or Lifetime Health Cover loading (LHC).
However, it's important to note that Basic hospital cover has its limitations and may not be sufficient if you require coverage for additional hospital treatments.
In such cases, it might be more worthwhile to consider upgrading to a Basic Plus, Bronze, or even a higher tier policy to ensure comprehensive coverage that aligns with your specific needs.
Why Choose Basic Hospital Cover
Saving on Taxes
If you earn over $90,000, the Medicare Levy Surcharge (MLS) could take a hefty chunk out of your income tax. This surcharge can reach up to 1.5% and quickly add up to thousands of dollars. The good news is, having a hospital health insurance policy can exempt you from paying the MLS. In fact, the cost of a Basic-tier policy can sometimes be lower than the amount you would have to pay for the MLS, meaning that opting for a Basic policy can actually save you money.
Avoiding Lifetime Health Cover (LHC) Loading
By getting Basic health insurance, you can steer clear of the Lifetime Health Cover (LHC) loading, which can make your health insurance more expensive as you get older. The LHC loading adds 2% to the cost of a health insurance policy for every year you don't have hospital coverage after your 31st birthday. This loading only reaches its maximum after 35 years, capping at 70%.
If you never plan to get hospital cover in your lifetime, you can avoid paying the LHC altogether. However, if you think you might want hospital cover in the future, getting a Basic policy now can protect you from ever being charged the LHC.
Ambulance Cover
While Basic policies may not cover a wide range of treatments, they often include ambulance cover, which can be incredibly useful if you require ambulance transportation, even to a public hospital. Not all hospital policies automatically include ambulance cover, so it's important to check the product details to ensure you're covered.
Does Extras-Only Health Insurance Come in Tiers like Hospital Cover?
The recent government reforms primarily focus on the classification of health insurance for hospital products. However, there are still a variety of extras cover options available, including entry-level plans.
When it comes to lower-level extras policies, it's important to keep in mind that they often have lower annual limits and higher out-of-pocket expenses. In some cases, opting for a higher level of extras cover may actually result in greater savings, especially if you frequently utilise the services included in your policy.
It's worth noting that extras-only policies are no longer allowed to have names that include the terms of any metal, gemstone, or semi-precious stone (e.g., Diamond or Platinum extras).
However, certain combined policies that include both hospital and extras coverage may be named Basic hospital cover and extras. This helps distinguish the type of coverage offered by the policy.
The Australian Government Rebate for Private Health Insurance
The Australian Government Rebate for Private Health Insurance is a way the government helps make private health insurance more affordable for people. It's like a discount on the cost of your health insurance premiums.
The rebate amount depends on things like your age, income, and the level of cover you have. You can either get the rebate as a reduction in your premium costs or as a tax offset when you do your taxes.
The goal of the rebate is to make private health insurance more accessible and to reduce the strain on public healthcare. It's meant to encourage more people to have private health insurance and to help balance the costs between the public and private healthcare systems.
The rebate is based on your income, so if you earn more, you'll get a lower rebate. But if you earn less, you might be eligible for a higher rebate.
To claim the rebate, you need to have an eligible private health insurance policy. You can either provide the required information to your insurance provider or claim the rebate when you do your taxes.
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FAQs
What are the different tiers of health insurance in Australia?
In Australia, health insurance is categorised into four tiers: Basic, Bronze, Silver, and Gold. Each tier is designed to cover a standardised set of treatments that are determined by the government. This standardised approach makes it easier for individuals to compare different policies since they all provide coverage for the same set of treatments.
What does Basic hospital treatment cover?
Basic-tier hospital policies provide limited coverage for a select number of treatments. They are required to offer restricted cover for rehabilitation, hospital psychiatric services, and palliative care. Basic hospital cover is generally recommended for individuals who primarily want to avoid the Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) loading. However, there are some 'Basic plus' policies available that offer coverage for additional treatments beyond the mandatory requirements.
What are 'plus' policies?
'Plus' policies refer to health insurance policies that provide coverage for additional treatments beyond the government-mandated requirements for a specific tier. For example, a 'Bronze plus' policy might include restricted cover for the three mandatory treatments and also offer coverage for joint reconstructions, which are typically only included in Bronze-tier policies.
Do Basic policies cover pre-existing conditions?
Yes, Basic policies do cover pre-existing conditions, provided that they are covered in the base policy and you have served a 12-month waiting period. It's important to note that this is a standard feature across all Australian health insurance policies, as it is mandated by the government.
What are out-of-pocket costs and copayments?
A copayment is a specific type of out-of-pocket cost that refers to a fixed amount you pay for a particular healthcare service. Copayments are typically set amounts, such as $20 for a doctor's visit or $10 for a prescription medication, etc.
