How to spot ‘quality’ cover and avoid a ‘junk policy’

“When planning for my operation, I found out my private health insurance didn’t cover me at all. What am I paying for?” Unfortunately this is an all too common question asked by some people when using their health cover for the first time. And it’s not hard to figure out why – understanding all of the complexities and jargon involved isn’t easy. So we’ve put together this guide on how to spot a good quality cover that’s right for you, and help you identify those low value options commonly referred to as ‘junk policies’.

1. Check what’s not covered in a private hospital

A common misconception held by many first time purchasers is that having health cover means you’ll be covered for all procedures in a private hospital. Unfortunately this is often not the case – what you are and aren’t covered for varies greatly depending on the level of hospital cover (eg. basic, medium or top), how much you pay and each individual insurer. The only real way to understand what you won’t be covered for in a private hospital is by paying close attention to the ‘restricted’ or ‘excluded’ services of each policy. Here are some of the common ones:

  • Hip and knee investigations or replacements.
  • Rehabilitation.
  • Psychiatric services (eg. drug and alcohol rehabilitation, depression and anxiety).
  • Pregnancy and childbirth.
  • Assisted reproductive services (IVF).
  • Heart-related investigations, treatment and surgery.
  • Cancer treatment and surgery.
  • Clinically necessary cosmetic and reconstructive surgery.
  • Cataract and eye lens procedures. A less obvious exclusion to look out for is the ‘other hospital services’ item. This often appears as ‘all other inpatient treatments receiving a Medicare benefit’ or similar, and groups together thousands of treatments that are recognised by Medicare. If this is an exclusion on your policy, be aware that you’ll only be covered for the limited number of included services listed.

Another thing to check for are the words ‘restricted’, ‘excluded’ or ‘minimum benefit’. If you spot these, it means you won’t be fully covered in a private hospital for those procedures and will likely face large out-of-pocket expenses.

At Bupa, all of our singles policies include common procedures that younger people use, like knee investigations and appendicitis treatment. If you’re looking for broader coverage, our Budget Hospital cover also includes cardiac, cancer, rehabilitation and thousands of other procedures eligible for a Medicare benefit.

2. How to identify a ‘junk policy’

Some polices on the market have been labelled as ‘junk policies’ because they provide low value cover limited to things like accidents. While they might be a tempting option if you’re looking to avoid paying the Lifetime Health Cover loading, even some of the most common procedures won’t be covered.

To identify a low value policy, be sure to scrutinise options that seem too cheap, have a long list of exclusions, or alternatively have a very short list of inclusions like accident only cover.

3. Is a private room covered?

One key reason for taking out health insurance is the desire to be in a private room should you need to go to hospital. If that’s important to you, make sure your chosen policy covers you for a private room rather than a shared one. For example, whether you choose a basic or top hospital cover with us, you’ll be covered for a private room in most private hospitals across Australia*. Our arrangements with Members First hospitals also mean that if you don’t receive a private room, you’ll get $50 back per night from the hospital^.

We hope we’ve given you enough information to help you choose quality health insurance. If you need any more information or advice, talk to us. Call 134 135.

*Private room covered at Bupa agreement hospitals, room availability and eligibility criteria apply. ^Private room subject to availability and eligibility. Must be booked and requested at least 24hrs before admission. For every night a private room is unavailable, you’ll receive $50 back per night from the hospital.