Need to know
- Private health insurance is not needed to cover treatment for COVID-19
- Testing for the virus, treatment and vaccination are free and covered by Medicare, and in NSW, ambulance transport is free for COVID-19 patients
- You can suspend your health insurance if you're in financial difficulty or if you're unable to use it during a lockdown
Stock images: Getty, unless otherwise stated.
With Australia in the grip of the Omicron wave, we've seen higher case numbers than ever before and our healthcare system is under stress. Check the latest government advice about coronavirus to make sure you're up to date.
At this point everyone knows someone who has COVID-19 or is in isolation and understandably people are wondering: does having private health insurance get you the best care if you're affected?
And how can you save money on health insurance, especially if you're in financial difficulty because of the pandemic, or can't use your extras cover because of social distancing?
You should keep or compare your health insurance during COVID-19 if you:
- need it for tax reasons (take our quick quiz to find out if this is you)
- expect to undergo a procedure in hospital in the next two years – despite extra funding from state governments, you're still most likely to get non-urgent elective surgery sooner if you have private health insurance
- are of an age where you're more likely to use your hospital insurance.
You should drop health insurance if you:
- have an extras policy but you're not using it
- have cover for procedures you don't need
- are under 30 and currently don't need health insurance.
Many Australians are experiencing financial hardship, especially during lockdowns. Here are some ways you can save money during this period.
- Ask for a financial hardship waiver.
- Ask for a discount.
- Suspend your policy.
- Review your level of cover.
- Drop your extras cover.
Ask for a financial hardship premium waiver
Health funds have money set aside for members in financial hardship so if, for example, you've lost your job, contact your fund and ask them to waive your premiums for a period. They may offer a suspension instead but try to insist to get a premium waiver. If your premium is waived, you remain covered under your policy (you won't be covered while your policy is suspended).
Ask for a discount
Legally, your health insurer can give you up to a 12% discount (about six weeks off your annual premium). Many health funds give you a discount if you pay by direct debit or prepay your premium, and some also give discounts to members of specific employers or organisations. You may qualify for a discount but not know about it.
You may qualify for a discount on your premium but not know about it
Suspend your policy
Your health insurer may offer to suspend your policy for a period such as 1–3 months. You won't be covered while your health insurance is suspended, but you can usually take up your cover again without having to serve waiting periods and it won't affect your Lifetime Health Cover loading. This might be a good option if you're unable to use your extras insurance because of social distancing.
Tax implications for suspended health insurance
If you earn more than $93,000 (single) or $186,000 (family, couple), dropping or suspending private hospital insurance will mean you pay extra tax. Consider switching to one of the cheapest hospital insurance policies for tax reasons instead.
What if I need to use my health insurance?
You can't use your health insurance policy while it's suspended. If you unexpectedly need cover during a period of suspension, talk to your fund as they may be able to lift your suspension. Different funds have different rules and some might be more flexible than others.
It's a good idea to take out cheap ambulance cover from health funds or an ambulance subscription so that you stay covered for ambulance trips while your policy is suspended – find out more about ambulance cover.
Review your policy and level of cover
Do you have the right cover for your needs? For example, do you need cover for pregnancy, IVF, obesity surgery, dialysis, hip/knee replacement and/or cataract surgery? These therapies are usually only covered with the most expensive Gold and Silver Plus policies.
If you don't need cover for one or more of them, you may be able to downgrade to a cheaper policy. Use our tool to compare health insurance and assess your options.
If after looking at your options you still want to drop your hospital cover, you can drop it for up to 1094 days (three years minus one day) in your lifetime without incurring the Lifetime Health Cover loading penalty.
If you drop your hospital cover, you'll have to re-serve waiting periods if you take it up again. Waiting periods are up to 12 months for pre-existing conditions and pregnancy.
Drop your extras cover
Do you pay too much for extras cover? Should you consider downgrading or dropping it altogether? Many people spend more on extras than they get back. In 2020, benefits were lower than usual because of restrictions on services due to COVID-19, making it more important than ever to check whether you're getting value from your extras cover.
Some funds now cover some extras services like psychology and physiotherapy provided over the phone or online (telehealth).
If you drop your extras cover and want to take it up again later, the waiting period for most services is usually 2–6 months. It can be higher, including 12 months for major dental work and orthodontics, and several years for services like hearing aids.
Should you become so sick that you need to get admitted to hospital, the federal Department of Health has told CHOICE you do not need health insurance to get good quality treatment.
"In the case of hospital treatment, doctors and hospitals determine who receives treatment, the treatment they receive, and the timing of the treatment. It is not determined by the government or insurers," says a Department of Health spokesperson.
"The private health insurance status of a patient who is affected by coronavirus will not determine their treatment."
While public hospital treatment is free for anyone who holds a Medicare card, you can use your private health insurance in a public hospital. Often this means you can choose your own doctor, but if you have COVID-19, you'll normally be treated by the doctor on call.
There are lots of reasons to get private health insurance, but COVID-19 is not one of them
Whether you're a public or private patient won't make a difference. There are lots of reasons to get private health insurance, but COVID-19 is not one of them.
If public hospitals are overstretched, public patients may be admitted to private hospitals for treatment of COVID-19. There will be no cost for treatment or accommodation in the hospital, just as in public hospitals.
In NSW, ambulance fees have been waived for COVID-19 patients who need transport to hospital. Find out more about ambulance cover.
Public hospitals and respiratory clinics can perform COVID-19 tests for free for people who need to get tested. Find your nearest testing centre.
However, if you're using a rapid antigen test, you'll have to buy it. There are some free tests available for concession card holders.
COVID-19 vaccination is free for everyone in Australia, including visitors, workers and students from overseas. Use the Health Direct Vaccine Eligibility Checker to see when and where you may be able to get vaccinated, and ask your doctor or local hospital for more information.
You can still get a free COVID-19 test if you don't have a Medicare card. Free COVID-19 vaccines are available at state or territory clinics, but not at GPs.
If you need hospital treatment for COVID-19, you can use your visitor health or travel insurance. If you don't have adequate insurance cover, some states and territories will waive healthcare costs associated with COVID-19 if a person is treated in a public hospital.
You may also be covered under a reciprocal agreement. Australia has agreements with Belgium, Finland, Italy, Malta, the Netherlands, New Zealand, Norway, the Republic of Ireland, Slovenia, Sweden and the United Kingdom. Under these agreements, visitors from these countries are covered for basic medical care.