Australians covered by health insurance will be familiar with waiting periods, which are identified as the extent of time in your health fund membership that no benefits are payable for certain services or procedures.
Waiting periods may also apply to any additional benefits when you upgrade your private health cover.
The topic of waiting periods is the focus of the Private Health Insurance Ombudsman's (PHIO) consumer bulletin, Health Insurance Insider for March.
PHIO Samantha Gavel states that it's important to understand the waiting periods that apply and how they may affect you.
All health funds in Australia are required by law to provide health insurance for residents regardless of their health status and if there were no waiting periods in place, people could take out hospital cover when they think they may need hospital treatment.
This in result would mean that long-term members of the health fund will have to fork out the fee, which could unfairly lead to higher premiums for all fund members – hence why waiting periods are set in place.
"By ensuring you understand the waiting periods that apply to your policy, you can avoid unexpected out-of-pocket costs for treatment provided while you are within a waiting period and not entitled to receive benefits," Ms Gavel wrote in the March 2013 edition of Health Insurance Insider.
What are the waiting periods for hospital cover?
Health funds usually apply the same waiting periods for hospital cover, but they can vary when it comes to overseas visitor cover and general treatment (extras).
Some funds may also apply Benefit Limitation Periods for some treatments on certain hospital covers.
The PHIO has stated that most health insurance funds will apply the following waiting periods to new members taking out hospital cover:
– General two month wait for any benefits
– Two month wait for rehabilitation, psychiatric care or palliative care (whether or not for a pre-existing condition)
– Twelve month wait for any benefits for pre-existing conditions
– Twelve month wait for benefits for obstetric treatment (pregnancy)
These are identified as the "maximum waiting periods" allowed by law for hospital cover.
Waiting periods can also apply to "any additional benefits on your new product" if you transfer to a higher level of hospital cover, whether it be your existing health fund or with another.
It's also important to note that membership of general treatment (extras) cover does not count towards your waiting periods for hospital cover.
What are the waiting periods for general treatment cover?
Typical waiting periods identified by the PHIO are:
– Two months for benefits for physiotherapy and general dental services
– Six months for benefits for glasses or lenses
– Twelve months for benefits for major dental procedures (Eg – Crowns or bridges)
– One to three years for some high cost procedures (Eg – Orthodontics)
Health funds may also apply additional waiting periods for some extras services if the condition being treated is considered to be pre-existing.
If you decide to change your extras cover to another fund, most funds will not make you serve waiting periods again for benefits.
All health funds vary with their extras covers, so it's important to check with the one you're thinking of changing to how they work their benefits and waiting periods.
You may find that some funds offer to waive waiting periods as part of a promotion to attract new members.
The PHIO states that they usually only waive the "general two-month waiting period for hospital benefits" or some of the waiting periods for general treatment services.
Just to be sure, make sure to check which waiting periods will still apply.