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Borrowed Time: Private Insurance and Individuals with Health Concerns

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Australia’s healthcare system is one of the most advanced and comprehensive in the world, providing effectively universal coverage for all of its citizens and visitors through the publicly funded Medicare system. However, there are also private insurance options widely available that may provide more specific or personalized coverage.

Private Insurance in Australia

Many people elect to take out private insurance policies rather than pay the 1.5% Medicare levy applied to many income sources. Private medical insurance provides extended coverage for individuals, an expanded network of treatment, and can work to eliminate out-of-pocket costs associated with healthcare as well.

Nevertheless, despite the fact that insurance rates are determined by a community rating, a measure of the overall health of the population, to minimize costs, the elderly and chronically ill often experience some difficulty in obtaining coverage from these private insurers.

Waiting Periods

While private insurers in Australia cannot deny coverage outright to any applicant, the waiting periods they can enforce before offering benefits serves as a significant barrier to individuals in less than ideal health.

Insurers in the country are allowed to impose a waiting period of up to two months to any applicant before providing full benefits and a waiting period spanning a calendar year before offering benefits to any person who manifests symptoms of a chronic illness (known as a PEA or Pre-Existing Affliction) in the 6 months before signing up for private insurance coverage.

They can also enforce a 12 month waiting period on issues related to childbirth. While these are not true denials, the unstable nature of old age or chronic affliction can demand time that is not guaranteed before a person can benefit from a policy.

These waiting periods are not mandatory, and may be waived on a case by case basis at the discretion of the insurer. You may be able to speak to a representative of an insurance provider in the hopes that your case will be expedited. You can visit HBF to compare health insurance today, finding a policy that works for both you and your family is crucial.

However, doing this frequently would result in a phenomenon known as “adverse selection,” where the provider would attract a disproportionate number of what they consider to be poor candidates for coverage. This leads to increased premiums and lower subscriber levels, which lead again into increased premiums, creating a vicious cycle that most insurers will be loath to expose themselves to.

The healthcare system in Australia is designed to serve the needs of as many people as possible by providing reliable access to basic healthcare. However, it is not a perfect system, and can leave individuals with ongoing health concerns or special needs related to their age with limited options for private healthcare.  Fortunately, Australia’s standard Medicare system is designed to address the majority of health concerns in the meantime.