Good cover essential for mental illness


Restrictions in health insurance policies can leave mental health patients without cover.

Feeling blue


We all have good days and bad days. But every year, one in five Australians experiences anxiety, depression and other mental health conditions preventing them and their families from going about their normal life.

Young people (15–24 years old) are among the most affected, and suicide is the biggest killer of young Australians, even before car accidents.

When it comes to treatment for mental illness, the public system is overstretched, and comprehensive private health cover is essential. Private health insurance funds about 80% of the costs covered for mentally ill patients in hospital.

But many health insurers are joining a raft of other insurers in restricting and limiting cover for psychiatric care.

For the best top-level policies covering psychiatry, see the CHOICE health insurance comparison.

Cover up

Many insurers recently increased cover restrictions for psychiatric care in hospital. For example, restricted membership fund TUH introduced a 12-month benefit limitation period from 1 November 2016 on their top cover policy.

  • Only medium and top cover hospital insurance policies cover mental health. See our buying guide for hospital insurance.
  • Even with policies that provide cover, limitations are often hidden in the fine print.
  • It's notoriously difficult to compare the cover available between different policies and funds.
  • To understand what you are actually covered for and to choose a policy that suits your needs can be a close to impossible task for mentally ill patients and their families.

Loopholes in health insurance for mental illness

Professor Malcolm Hopwood, president of the Royal Australian and New Zealand College of Psychiatrists (RANZCP), calls for greater transparency of cover provided by private health insurance policies.

Examples reported by RANZCP psychiatrists include the case of a 30-year-old mentally ill man:

  • He was denied admission to hospital at a time when he was suicidal.
  • His health fund said he had already used up the maximum yearly number of psychiatric admission days.
  • Only after intervention of his psychiatrist, the insurer relented.
  • The admission was delayed by many days, causing the patient undue stress.

Professor Hopwood also reports problems with cover limitations for:

  • day programs providing group therapy in hospital
  • outreach programs providing mental health services in the patient's home.

Both programs assist in transitioning from care in hospital back to the community. Health insurer Bupa, for example, only covers day programs in hospitals that Bupa has an agreement with.

Mental health cover checklist

Unlike other pre-existing conditions that have a 12-month waiting period, the waiting period on all hospital cover policies for psychiatric cover is only a maximum of two months.

If this cover is important to you, ask:

  • does this policy cover in-patient psychiatric care in a public and private hospital? Is there an annual maximum number of admissions or days covered in hospital? And does it cover re-admission to hospital within days of a previous hospital stay?
  • does it cover day programs in private hospital? Is there a limitation on the number of visits per year and on how many hours per visit are covered?
  • how about outreach nursing? Is day program and outreach nursing covered at the same time?
  • is there cover for specific treatments, such as electroconvulsive therapy, to treat severe depression?
  • does it cover all public and private hospitals or only a selection? Different private hospitals specialise in the treatment of different mental health conditions, and you want to be able to access the best one for your needs.

Also check on potential out-of-pocket expenses. For example, health insurance fund Medibank has stopped full cover for pathology provided in hospital.

Next to hospital policies, some extras cover policies will also provide cover for counselling or pay part of the costs to visit a psychologist. To find which extras policies we recommend for your needs, use our health insurance comparison.

If you have a complaint about your health fund, contact the Private Health Insurance Ombudsman on 1300 362 072.

For immediate assistance, contact 24/7:


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