Don't fall for junk accident health insurance
Health insurance funds often promote accident cover to young customers, but these policies can be so-called junk health insurance that cover only a small number of treatments and come with restrictions.
In this article, we take a look at:
Do you need accident cover?
Even without private insurance, you don't need to worry about copping a bill for tens of thousands of dollars if you get hit by a bus or need your appendix out. Medicare covers emergency care in a public hospital.
However, you may want cover in a private hospital for ongoing treatments associated with having an accident, or cover for ambulance transportation.
Top hospital insurance will have you covered for all this, but other options are accident cover and ambulance-only cover. These are cheaper options, but they may not be good value.
Accident cover will usually include emergency ambulance transportation, and give you the option to use the emergency departments of private hospitals, but it's otherwise very limited. It also usually comes with restrictions such as:
- you have to attend your hospital's emergency department within the first 24 hours after an accident to be covered,
- you can only get treatment for a limited number of days and only within the same admission,
- cover may expire, for example after six months (which may be before your treatment is finished). So, for example, you may be covered for the initial surgery for a broken leg, but not for getting pins and screws taken out six months later.
Do you need ambulance cover?
A trip to hospital in an ambulance can easily cost around $1000 depending on how far away you are from the nearest hospital.
If it's just ambulance cover you're concerned about, you may find you're already covered by your state government, or that a state subscription service might offer better value. Your options depend upon where you live.
- Residents of Tasmania and Queensland have their ambulance trips covered by their state governments. (Tasmanian residents are currently not covered for ambulance if they travel in QLD and SA while Queensland residents are covered in all states)
- Residents of NSW, the ACT and the Perth metro area (including Fremantle and Armadale) need health insurance if you want to be covered for ambulance.
- Residents of the Northern Territory, South Australia, Victoria and rural WA can either get ambulance cover in their health insurance or through a state ambulance subscription.
If you get ambulance cover with your hospital or combined hospital and extras policies, you need to know you'll often only be covered for emergency ambulance. That can mean you're not covered for:
- ambulance officers treating you "at the scene" if you don't need to get taken to hospital,
- non-emergency transfer to hospital,
- more than one trip per person or two per family per year,
- evacuation by air or sea ambulance – often only road ambulance is covered.
Are ambulance subscriptions the best option?
- Ambulance subscriptions are only available in the Northern Territory, South Australia, Victoria and rural WA.
- Ambulance subscriptions usually don't have the kind of restrictions ambulance health cover does.
- Extras insurance may offer a refund for an ambulance service subscription – depending on the policy you may be entitled to a 60% refund, for example.
- There's no government rebate on state ambulance subscriptions, but even without the rebate a subscription may still be better value than, say, ambulance-only health insurance policies.
- Pensioners and concession card-holders may get free ambulance cover.
Ambulance subscription costs
||$106 single or $125 family
|| $81 single or $161 family
|| $46.00 single or $92.05 family
|| Ambulance subscriptions available in rural WA only.
Pricing varies. See stjohnambulance.com.au.
Note: Some ambulance services give discounts for subscriptions of two or more years.
- An ambulance-only health policy is cheaper than hospital insurance, but beware: these policies cover you purely for ambulance, there's no hospital or extras cover included, and they also don't help you avoid the Lifetime Health Cover loading or the Medicare Levy Surcharge (read this jargon buster for an explanation of these).
- Strict consumer information provisions for health insurance policies don't apply to ambulance-only policies, which makes it much harder for people to compare policies side-by-side. This is concerning, as these policies often have detailed coverage restrictions.
- On the plus side, unlike state ambulance subscriptions, health fund ambulance policies do attract the health insurance rebate – but even with the rebate, you may find an ambulance subscription service (if available in your state) is still cheaper or better value.
If you live in Victoria, South Australia or the Northern Territory, you can get ambulance cover through either a state subscription or with private health cover. We've priced a subscription with your state ambulance service, and compared it with:
- basic cover for emergency ambulance or 'premium' ambulance from Bupa,
- comprehensive' ambulance cover from Medibank.
All three private insurance policies provide less cover than a subscription with the state ambulance service:
- For singles in NT the Medibank and Bupa premium cover policies including the full rebate are slightly cheaper but provide less cover than the ambulance subscription. For couples and families, the Medibank and Bupa premium cover policies after the full rebate are more expensive.
- In Victoria and SA, Medibank's and Bupa's premium cover policies are a bad choice, as they're more expensive and provide less cover than the ambulance subscription. And again, that's even after the full rebate.
Here's our comparison for family ambulance cover in Victoria.
Victoria snapshot: family ambulance cover types compared
||Full ambulance cover from state ambulance service, including non-emergency ambulance that's clinically necessary.
||Comprehensive ambulance cover from Medibank.
||Emergency transport-only cover from Bupa; doesn't cover you for non-emergency ambulance transport even if it's clinically necessary.
||Bupa premium cover; includes additional $5000 for non-emergency ambulance trips.
Note: * Premiums are after health insurance rebate.
When we asked the insurers about the value of their products, they pointed out that ambulance policies cover you anywhere in Australia, which not all state ambulance service subscriptions do:
- Victoria ambulance covers you nationwide.
- NT ambulance currently doesn't cover you in SA.
- SA ambulance asks for an extra amount ($15 singles/$30 family) to extend the cover across Australia.
What cover do you need for accidents and emergencies?
Quality private hospital policies will cover emergency ambulance, as well as thousands of services in a public and private hospital for both accident-related treatments (e.g. for a broken leg, burns, cuts or a concussion) and non-accident-related treatments (e.g. cancer screening and surgery, gallstone surgery, flu and asthma).
In the following table is our pick of the best basic hospital policies with accident cover. They all include cover for:
- Rehabilitation Rehabilitative services in a public hospital are good but can be overcrowded. Private hospital cover gives you greater access and flexibility of where and when you have your treatment.
- Plastic surgery (non-cosmetic) This includes reconstructive surgery for medical reasons after an accident. (Note that cosmetic surgery isn't covered by Medicare or private health insurance.) Public hospital services are good for reconstructive plastic surgery (such as for burns), but waiting lists are up to five months. Also, plastic surgery is more readily available in the private system, and you might prefer a plastic surgeon over a general surgeon for some procedures to reduce the risk of scarring.
- Palliative care Covers services designed to help people with a life-limiting or terminal injury or illness live life as comfortably as possible. Can include home nursing and equipment hire. Public hospitals, and community services and facilities also offer good palliative care and are often fully funded by Medicare. Choose private hospital cover for palliative care if you'd prefer the comforts and setting of a private hospital.
- Major heart surgery: Heart disease (also called cardiovascular disease) is the leading cause of death in Australia and includes life-threatening conditions such as heart attack and stroke. Urgent heart surgery, such as for heart attacks, can be treated quickly in public hospitals, but you can encounter waiting lists of up to three months for other treatments such as stent procedures, valve replacements and pacemaker implants.
Read on for our recommended policies for accidents and emergencies.