Bupa health insurance cuts - what you need to know


More than 700,000 Bupa members to receive fewer hospital benefits.

Pay more, get less


  • Ombudsman says Bupa's communication of changes to its customers wasn't clear enough.
  • Bupa announced in February that over 700,000 members on budget cover will no longer have cover for hip replacements, cataracts, pregnancy and other pricey hospital treatments from 1 July.
  • Bupa backtracks on changes to its gap scheme for public hospitals.
  • Affected members must decide if they want to upgrade to a higher cover Bupa policy by 1 September if they want to avoid waiting periods, or accept a lower level of cover.
  • Upgrading can cost families up to $2000 more.

Bupa and HBF are making big changes to some policies, which means reduced cover for many customers. We've updated our hospital insurance comparison tool with the changes, so you can compare with confidence.

Ombudsman says consumers might have overlooked changes

With premiums going up and benefits headed in the other direction across the industry, matters will get worse for Bupa customers with its budget policies excluding a range of services from 1 July 2018.

The ombudsman says that Bupa didn't make its changes clear enough in a 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."

Bupa concedes this was the case. "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 has extended the deadline for members to upgrade their policies without incurring a waiting period until 1 September 2018. However, upgrading your policy can have significant costs with families in Victoria paying $1810 more when they upgrade from budget to top cover (both policies with $500 excess before the health insurance rebate).

What are the changes to Bupa policies?

Bupa will exclude cover for high costs services from its budget cover policies. Services include hip and knee replacements, pregnancy, eye surgery (cataract), obesity surgery, dialysis, lipectomy and abdominoplasty (tummy tuck).

Currently those services are restricted. With restricted services you're covered for treatment in a public hospital, but you can choose your own doctor and with luck have a private room. However, you'll have to wait in line with public patients to get your surgery scheduled. You can also elect to go to a private hospital but will only be covered for part of the costs.

With services like hip replacements, wait times for public patients can be up to three years and if you want treatment sooner, you need to go to a private hospital. With restricted cover you are covered for medical costs like the surgeon's fee and the prosthesis which can cost about $10,000. But you only get part of the costs for the hospital costs like theatre fees and hospital accommodation.

Currently this means you get a benefit for about half of the $25,000 charge in a private hospital. After Bupa's changes you will have to pay the entire cost of $25,000 in a private hospital and need to elect to be a public patient in a public hospital if you don't want to incur significant costs.

At present, regional patients who only have access to a public hospital are able to choose their own doctor if they have one of the above procedures in their regional public hospital. This benefit will now be removed and if they want to keep it and stay with Bupa, they will have to upgrade to expensive private hospital cover that they'll have very little opportunity to use. Their only other option to maintain public hospital cover is to switch insurers but they'll have to do that before 1 July 2018 to avoid incurring waiting periods.

"People need equitable, affordable access to quality healthcare. Health insurance products that provide very low value for customers, whether they are restricted or excluded cover policies, are undermining this," says CHOICE campaigns lead Katinka Day. 

Bupa customers: "What should I do?"

Take a look at what's changed in the policies we've listed below, and consider your health cover needs: 

  • If you think you'll need cover for any of the affected services in the next 12 months, 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 they're waiving the 12-month waiting period if you upgrade before 1 September. 
  • If you don't think you'll need any of the affected services in the next 12 months, use our health insurance comparison to see if there's a better health policy for your needs.
  • If you only have access to a public hospital where you live, you should consider switching providers to one that provides public hospital cover only.

Bupa's hospital policies – what's changed?

Bupa has five stand-alone hospital policies they currently sell. If your policy isn't among these, you either have a combined hospital and extras policy, a policy that's no longer available for sale, or a corporate policy. 

Bupa has sent letters to affected customers, but the ombudsman says that they weren't very clear so if you have further questions, contact them directly.

Basic cover

A low-cover policy with many exclusions – there won't be any changes to this cover, but it's worth reviewing whether it meets your needs. 

Take our quick quiz, Do I need health insurance? and if you still want cover, compare policies with our health insurance reviews.

Budget cover

This is the cover with the most changes. While you're currently covered for pregnancy and birth in a public hospital, you won't be covered from 1 July 2018. We advise that you review your cover – your best option may be to upgrade. 

From 1 July this cover excludes:

  • pregnancy and birth related services
  • fertility treatment such as IVF
  • hip and knee replacements
  • major eye (cataract and eye lens) surgery 
  • renal dialysis 
  • obesity surgery such as gastric banding, including abdominoplasty and lipectomy.

You're also only covered in a public hospital for psychiatric care.

Standard hospital

This covers pregnancy and thousands of other treatments in a public and private hospital. Four treatments that are currently covered in a public hospital will be excluded from 1 July. This isn't a big change, as public hospital treatment for these procedures is hard to get or has long waiting times. If you need them, upgrade to top cover. 

From 1 July this cover excludes:

  • fertility treatment such as IVF
  • hip and knee replacements
  • major eye (cataract and eye lens) surgery
  • renal dialysis.

Top cover

Covers all treatments and procedures covered by Medicare in a public and private hospital. There are no changes to this policy.

Top cover – no pregnancy

This cover is a bad option as it costs exactly the same as top cover but doesn't cover some services. Even if you don't need these services, we don't recommend this cover. This cover excludes:

  • pregnancy and birth related services
  • fertility treatment such as IVF
  • obesity surgery such as gastric banding. 

There are no changes to this policy.

How much will it cost to upgrade?

You'll pay considerably more if you upgrade to a policy with higher cover (premiums below are before the Medicare Levy Surcharge). 

  • $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).

Bupa backtracks with changes to public hospital gap cover

If you use a hospital that doesn't have an agreement with Bupa, you could face gap fees that go into the thousands. 

Initially Bupa had said that members wouldn't receive gap cover in public hospitals in all situations. But the health fund has now backtracked, now saying that gap cover will still apply fully for planned admissions to public hospitals (booked at least 48 hours before admission). Higher out-of-pocket fees can apply to members who get admitted to the public hospital through the emergency department if their doctor charges above the rate set by Bupa for no-gap agreements.

"We have listened to customers and know they want to maintain choice of doctor in a public hospital, but also wanted to see value for money and no surprises over gap charges from doctors." says Bowden.

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. 

There are two types of gaps:

  • Hospital gap: for example, for accommodation and operating theatre costs. Bupa already didn't fully cover these costs in non-agreement day facilities and private hospitals, however, they normally covered these costs in public hospitals.
  • Medical gap: for example, for doctor and surgeon fees. Bupa patients will now also face higher out-of-pocket costs for doctors' bills in non-agreement private day facilities and hospitals and all public hospitals.


Bupa defends changes

Bupa says removing restrictions and replacing them with exclusions will make affected policies easier to understand.

"If customers went to a private hospital they were only covered for the shared room public hospital rate, which left them with a large out-of-pocket cost," says Bupa spokesperson James Howe.

Restricted policies in general already had problems before the Bupa announcement. The Private Health Insurance Ombudsman 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 the Private Health Insurance Ombudsman were about restrictions and exclusions.

"Consumers need an easier way to understand which products provide adequate cover and are good value for money. The government should act to scrap junk policies, and make sure that these policies are not eligible for health insurance rebates," says Day.

"If you're struggling with the cost of private health insurance, it's worth using CHOICE's free tool, Do I Need Health Insurance? to cut through some of the complexity and marketing spin."

How can I save on health insurance?

All health funds raised premiums on 1 April 2018, so with the end of the financial year approaching now's a good time to review health cover. 


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