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What are waiting periods and how do they work?

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Health insurance waiting periods

A health insurance waiting period is the time between taking out or upgrading a health insurance policy and when the specific benefits of that policy are available to you and others covered under your policy. This delay serves to protect a fund and its members from new members who could easily abuse the benefits of private health insurance.

While many customers would like health insurance with no waiting period, private health insurance provider will specify different waiting periods depending on the fund and the level of cover.

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Health insurance, no waiting period

While new customers are looking for no waiting period health insurance, the reality is that waiting periods will typically be between 2 and 12 months. The government sets the maximum waiting period that a fund can apply to new member joining hospital cover through the Private Health Insurance Act 2007. Under this act, no health insurance waiting period (hospital cover) can exceed 12 months.

The government has also set portability rules for hospital cover to ensure members can transfer between health funds without penalty. If you are transferring between funds with the same level or a lower level of hospital cover, there will be no waiting period for health insurance with equivalent benefits. However, your new health fund may require waiting periods to be served before you are eligible for any new or higher level benefits on your new health insurance policy.

For people new to hospital cover, or upgrading from a lower level of hospital cover, waiting periods will typically be:

  • 12 months for pre-existing conditions
  • 12 months for Obstetrics
  • 2 months for Psychiatric care, Rehabilitation or Palliative care (whether or not these are pre-existing conditions)
  • 2 months in all other circumstances

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Extras health insurance, no waiting period

There are no government regulations covering the length of any Extras health insurance waiting period for benefits included under Extras cover. However, private health funds will often have waiting periods of less than 12 months. Again, these will not usually apply to members who switch to a policy with equivalent or lower benefits with another private health fund. In addition, funds are often willing to waive some waiting periods on some services in Extras cover to attract new members.

Continuity of cover

If you switch between funds, the new fund will usually provide continuity of cover for an equivalent policy. This means that any waiting periods you have already served with your old fund may be honoured by your new fund and you will not have to serve waiting periods again for the same or lower level cover.

Travelling overseas

Some funds allow you to pause your cover, including any waiting periods, while you are overseas. Typically, you will have to provide evidence of departure from and re-entry to Australia for this to happen. This can be a real benefit if you have already served a waiting period and expect to be overseas for an extended period. You may be able to remain a member of your fund, may not have to pay any money and you will preserve the waiting periods you have already served. However, you will not be able to claim any benefits while your cover has been paused.

Choosewell can help you understand and compare private health insurance and assist you in finding a health fund and policy to suit your needs and budget. If you have any questions about waiting periods, call us on 1300 421 154 and ask us if we can arrange for some of your Extras cover waiting periods to be waived.

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