Bupa health insurance cuts – FAQs

Check how your health insurance cover has changed and what your options are.

Upgrade, switch or ditch?

Bupa's cuts to health insurance cover are now in effect, but members aren't out of options. Bupa customers can still: 

  • switch to a better policy
  • ditch health insurance altogether 
  • take up Bupa's offer to upgrade without serving waiting times.

Bupa cuts timeline

  • 1 July: 700,000 Bupa members on budget cover no longer covered for hip replacements, cataracts, pregnancy and other pricey hospital treatments.
  • 1 August: Bupa changes to gap cover came into effect – you no longer receive gap cover in non-agreement private hospitals and day surgeries.
  • 31 August: Deadline to upgrade to a higher level Bupa policy without serving a waiting period. However, upgrading can cost families up to $2000 a year more.

If, after the changes, you're no longer covered for treatments you want to use within the next 12 months (for example, if you're pregnant), you have until 31 August to upgrade to a higher cover Bupa policy to receive cover straight away. If you switch to another insurer, you'll have to serve a waiting period of 12 months for anything you're currently not covered for.

How the policies have changed

Some of the Bupa policies are what we call 'junk policies'. Find out what is a junk policy and why they're not good value.

Bupa policy-holder FAQs

Bupa now excludes cover for expensive services from its budget policies. Services that were previously restricted (only covered in public hospitals) became completely excluded on 1 July, including hip and knee replacements, pregnancy, eye surgery (cataract), obesity surgery, dialysis, lipectomy and abdominoplasty (tummy tuck) and spinal fusion.

How restricted services were covered before 1 July:

  • In a public hospital: You were covered for treatment as a private patient, so you could choose your own doctor and with luck have a private room. But you would have to wait on a list with public patients to get your surgery scheduled.
  • In a private hospital: You could go to a private hospital to get treatment sooner but were only covered for part of the costs. You were covered for medical costs like the surgeon's fee and prostheses, but you could only get a benefit for part of the cost of the hospital charges like theatre fees and accommodation. For example, for a hip replacement that costs $25,000 in total you'd be covered for about half of the costs – this includes the prosthesis which may cost $10,000 – but you'd still have a large out-of-pocket cost of about $12,500.
  • Regional patients who only have access to a public hospital were able to choose their own doctor in their regional public hospital.

How those services are covered now

  • In a public hospital: You're not covered as a private patient, and need to go as a public patient if you don't want to incur significant costs.
  • In a private hospital: You're not covered. For example, for a hip replacement that costs $25,000, you'll have to pay the entire cost.
  • Regional patients: You're not covered as a private patient. If you want to choose your own doctor in a regional public hospital you'll have to upgrade to expensive private hospital cover that you'll have limited opportunity to use. Your only other option to maintain public hospital cover is to switch insurers, but you'll have to serve waiting periods.

On 1 August Bupa made changes to its gap cover for private and public hospitals:

Private hospitals: If you use a hospital that doesn't have an agreement with Bupa, you won't be covered for the gap between what the doctor charges and the fee set by Medicare. You could face gap fees that go into the thousands of dollars so check if your local private hospital has an agreement with Bupa.

Public hospitals:

  • Planned admissions: Gap cover will apply fully for planned admissions to public hospitals (booked at least 48 hours before admission). 
  • Emergency department admissions: Higher out-of-pocket fees can apply to members admitted to a public hospital through the emergency department if their doctor charges above the no-gap agreement rate set by Bupa.

What is a gap?

A gap is the difference between what Medicare and your private health fund will pay towards your treatment, and what your doctor or hospital charges. You'll need to pay the difference (the gap), which is why it's also sometimes called your out-of-pocket cost. Read more on how to avoid out-of-pocket costs.

There are two types of gaps:

  • Hospital gap: for charges like hospital accommodation and operating theatre costs. Bupa's policies already didn't fully cover these costs in non-agreement day facilities and private hospitals. However, they usually did cover these costs in public hospitals.
  • Medical gap: these cover doctors' fees, including those charged by your surgeon and anaesthetist. From 1 August Bupa patients will now also face higher out-of-pocket costs for doctors' bills in non-agreement private day facilities and hospitals.
  • If you need cover for any of the now-excluded procedures in the next 12 months – if, for example, you are pregnant, and you are no longer covered for pregnancy – it may be best to take up Bupa's offer to upgrade your policy to top private hospital cover. You'll pay a higher premium, but Bupa will waive the 12-month waiting period for pre-existing conditions and pregnancy if you upgrade before 1 September.
  • If you don't need cover for any of the affected services in the next 12 months, see if there's a better or cheaper health policy for your needs.
  • If you live in a regional area: If you only have access to a public hospital where you live, compare your policy to one that provides public hospital cover only, which may save you money.

How much will it cost to upgrade?

You'll pay considerably more if you upgrade to a policy with higher cover (premiums listed below are for annual costs before the private health insurance rebate is applied).

  • $865 – for a single person in NSW upgrading from Budget Hospital to Top Hospital (both policies with $500 excess)
  • $1810 – for a family in Victoria upgrading from Budget Hospital to Top Hospital (both policies with $500 excess)
  • $302 – for a couple in Queensland upgrading from Standard Hospital to Top Hospital (both policies with $500 excess).

Restricted policies already had problems before the Bupa announcement. The Private Health Insurance Ombudsman (PHIO) has repeatedly warned that downgrading policies to restricted or budget cover often leaves customers without the cover they need or high unexpected out-of-pocket costs.

In the last quarter, the highest number of complaints to PHIO were about restrictions and exclusions.

The health minister, Greg Hunt, asked the Ombudsman to investigate the Bupa cuts and a June report said Bupa didn't make its changes clear enough in its premium update letter to members: "It is difficult to say whether some consumers will overlook or misunderstand the fact that their policy has been downgraded because of the design of this communication."

The Ombudsman recommended that Bupa's next communication to its members "should give increased prominence to the detrimental changes". The Ombudsman also concluded that Bupa customers in regional areas were more disadvantaged than customers living in capital cities, as they are more likely to use public hospitals. 

Bupa says removing restrictions and replacing them with exclusions makes affected policies easier to understand. Bupa admits that consumers who did not understand that restricted cover meant they were only covered for a part of the cost were left with large out-of-pocket costs when they went to hospital.

However, Bupa concedes that the Ombudsman is right about how they communicated the changes. "We recognise some people who were affected by the change may not have known how that change impacted them or what they need to do to stay covered," says Richard Bowden, Bupa Australia and New Zealand CEO. As a result, Bupa:

  • extended the deadline for members to upgrade their policies without serving a waiting period until 31 August 2018
  • committed to contact all customers making sure they understood how they might be impacted.

CHOICE advocates for the needs of consumers in the health insurance sector. We think people need access to clear information, at the right time and in a convenient format, to compare their product to others that meet their needs.

"People need equitable, affordable access to quality healthcare. Health insurance products that provide very low value for customers, through restricted or excluded cover policies, undermine this," says CHOICE campaigns and policy team leader Katinka Day.

How to save on health insurance

"Private health insurers would have us believe we need health insurance, but for many people that might not always be the case. So if you're struggling with the cost of private health insurance, it's worth using CHOICE's free tool, Do I Need Health Insurance?

All health funds raised premiums on 1 April 2018, so the start of a new financial year is a good time to review health cover.

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