Health Insurance Explained

An annual limit is the maximum amount of benefits payable towards services, items or groups of services/and or items within a calendar year. Annual limits are calculated for a calendar year i.e. 1 January to 31 December each year. If you change your cover (or insurer), limits that have been used under your previous level of cover will be carried over and considered when determining the first-year limit on your CUA Health policy.

A combined annual limit is the maximum amount of benefits you can claim, distributed across a group of services.

A sub-limit is the maximum amount within an Annual or Combined Limit you can claim towards specific services.

Each person on your cover can claim up to the ‘per person’ limit, except where a family limit applies and has already been reached by the other members on the policy.

This is the total amount that can be claimed by all members on your policy. This applies to any Single Parent, Couple or Family policy.

A lifetime limit is the total benefit you can claim for this service in a lifetime.  If you change your cover (or insurer), lifetime limits that have been used under your previous level of cover will be carried over and considered when determining the lifetime limit on your CUA Health policy.

As a way of rewarding our members for staying with CUA Health, some of our products include loyalty limits.  The annual limit will increase over the first three years by a set amount. The loyalty limits are calculated using the anniversary of you joining the policy.

The Australian Government offers a rebate to help cover the cost of your private health insurance premium and can be claimed on both Extras and Hospital cover. The amount of rebate you might receive is calculated based on your income. CUA Health can apply your rebate directly to your health cover policy to reduce the amount of your premium or you can claim your rebate at tax time.

If you’re eligible to Medicare benefits then you qualify to receive the rebate, it varies depending on your income.

Here you can find the rebate levels applicable.

Private Health insurance helps reduce or eliminate your out of pocket expenses for medical treatment in or outside of hospital, while giving you wider access to health care professionals.

While Medicare covers you for treatment in a public hospital, private hospital cover lets you choose when and where you are treated and the doctor you see. Extras cover also helps reduce the cost for many services not covered by Medicare like dental, optical and physio.

If you don’t have Hospital cover, you can still be treated by the public health care system in the event you need to go to hospital. If you require surgery, you will be placed on a waiting list.

It’s important to note, if you’re over 31 years old or earn more than $90,000 p.a. as a single or $180,000 as a couple, you may have to pay the Medicare Levy Surcharge or Lifetime Health Cover loading if you don’t have Private Hospital Cover and decide to take it later in life. Find out more on saving tax.

Health insurers now have the option to offer Australians aged 18-29 years of age a discount of up to 10% on their private hospital insurance premiums.

CUA Health understands affordability is a major factor in many young Australians being able to take out private hospital cover – so we are adopting hospital health cover discounts of up to 2% for every year a member is under 30 years of age, and up to 10% for 18-25 year old.

The youth discount does not apply to extras products.

For CUA Health members, the discount will automatically apply If:

1. A member chooses (or already has on 1 April 2019) a hospital product that is eligible for discounts; and
2. Is of eligible age (18-29),

The rate of discounts depends upon;

• The age the person locked in their discount when they first received discount (if switching)
• The age that they joined a hospital product on CUA Health that offers a youth discount.
• The age the person on an eligible product, on the day the insurer first offered discount (E.g. 1 April For CUA health members)

Once a policy holder has aa youth discount they will retain that discount rate until they turn 41 if they remain on a policy that is eligible for the discount.

When more than one adult is eligible on the policy, the average rate between the two will apply.

A key concern for consumers was the complexity and difficulty of understanding and comparing private health insurance products.

Before the reforms, health funds usually name the hospital benefit category themselves, for example: Heart and Artery related services, Heart conditions, Cardiac Procedures, Cardiac and Cardiac related procedures. This created confusion for consumer as the scope of treatment and benefits paid varied from health fund to health fund.

This is the reason why a standard set of clinical categories has been introduced to define what different products do and do not cover, helping consumers make an informed choice about private health insurance.

From 1 April 2019, all health funds are required to use the standard clinical categories to inform customers of treatments and services included in their hospital insurance policy, making it easier to understand what different products do and do not cover.

A clinical category is defined as a group of hospital treatments/services that must be covered by a Medicare Benefit Schedule (MBS) item number. This means that if the category is covered, all health funds must cover the same treatments/services for each clinical category.

This will eliminate the confusion of the treatments covered under each product available in the market making it easier to compare and choose the cover that’s right for you.

Starting 1 April 2019 hospital policies will be categorised into tiers with minimum requirements of cover for each level of cover: Gold, Silver, Bronze and Basic.

Hospital products must now cover certain standard clinical categories depending on the tier it fits into. The higher the tier, the more it must cover.

If a clinical category is covered under a tier, then a health insurer must ensure that all MBS items of the category are covered. Policy names must include the tier category to easily identify the tier.

In addition, an insurer may use the word ‘Plus’ (or symbol ‘+)’ e.g. ‘Silver Plus’ to indicate that the policy covers the minimum clinical categories for a Silver tier hospital product, but it has some additional inclusions.

The new product tiers will give consumers greater certainty about the services covered by each type of hospital treatment product

Following a review chaired by the former Commonwealth Chief Medical Officer, some natural therapies will be excluded from the definition of private health insurance general treatment, as there is no clear evidence demonstrating their efficacy.

From 1 April 2019 private health insurers will no longer be able to pay benefits for the excluded natural therapies services.

Not covered from 1 April 2019

• Alexander technique
• Aromatherapy
• Bowen therapy
• Buteyko
• Feldenkrais
• Herbalism
• Homeopathy
• Iridology
• Kinesiology
• Naturopathy
• Pilates
• Reflexology
• Rolfing
• Shiatsu
• Tai chi and yoga

CUA Health will continue to pay for those services that are still approved by the government and that are popular with our members. These include acupuncture, remedial massage and a newly introduced benefit for Chinese Herbal Medicine.

In the case where health professionals provide excluded natural therapies as an element of other treatment, health insurers may pay benefits if the services provided are within the accepted scope of clinical practice. For example, a physiotherapist providing pilates services.

For additional information on eligibility of services please visit the Department of Health.

Consumers are concerned with the premium increases and affordability. To assist with this, insurers will be able to increase the permitted excesses for private hospital insurance.

Maximum excess levels allowable by the government, will increase from $500 to $750 for singles and from $1000 to $1500 for couples/families.

Include a cover letter, a product change sheet and a Private Health Information Statement (PHIS).

This is an important opportunity for you to review your health cover, making sure you consider your personal health situation or any changing personal circumstances. This will provide a period to consider your current health insurance cover and to make any date, if needed.

If you’d like to review or discuss your options, we would welcome the opportunity to discuss this with you. You can contact us Mon - Fri: 8:00am - 5:00pm (AEST) on 1300 499 260.

The Private Health Insurance Ombudsman (PHIO) website privatehealth.gov.au will be redeveloped to better assist consumers in comparing different health insurance products.

As a result, the current Standard Information Statement (SIS) will be replaced by a Private Health Information Statement (PHIS) as the regulated method by which insurers provide information to consumers.

The Medicare Levy Surcharge is an additional tax charged to people who earn more than the specified threshold and don’t have Private Hospital cover. All CUA Health Hospital Cover policies satisfy the Government criteria to avoid the surcharge (to avoid the tax, you only need Hospital cover, not Extras cover).

The Medicare Levy Surcharge will apply to you if you earn over $93,000 a year as a single, or $186,000 as a couple or family and don't have private hospital cover. The surcharge varies from 1% to 1.5% depending on your income.

‘Lifetime Health Cover’ is a Government initiative designed to encourage people to take out private hospital insurance earlier in life and maintain their cover.

People who delay taking out cover will pay a 2% loading on top of their premium for every year they’re aged over 30 when they first take out private hospital cover and the loading applies for 10 years. For example, if you took out private hospital cover for the first time at the age of 40, you would have an additional 20% on your premium every year for 10 years.

‘Lifetime Health Cover’ is a Government initiative designed to encourage people to take out private hospital insurance earlier in life and maintain their cover.

People who delay taking out cover will pay a 2% loading on top of their premium for every year they’re aged over 30 when they first take out private hospital cover and the loading applies for 10 years. For example, if you took out private hospital cover for the first time at the age of 40, you would have an additional 20% on your premium every year for 10 years.

A gap is the amount of the medical bill that remains to be paid by the patient after Medicare and/or private health funds have paid their share.

All of CUA Health Hospital Cover options include ‘gap cover’, which means that if your doctor and hospital agree to treat you on the ‘Access Gap Cover Scheme’ you will have little to no gap to pay.

It’s always a good idea to ask your doctor or medical provider for an estimate of any out of pocket expenses you may incur, particularly if you’re having surgery.

If you’re aware of a medical condition you already have, you can still take out health cover with CUA Health. You will have to wait 12 months before you will be covered for treatment relating to your pre-existing medical condition unless this waiting period was served with another provider.