How do private health insurance waiting periods work?

Ever wondered why you can't claim on your policy right away or why some conditions have you tapping your fingers for longer than others? The reality is it’s something that most Australians have to serve before making a claim.

So join us as we break down these sometimes-frustrating waiting periods – from deciphering exactly how long you’ll need to wait, to understanding how pre-existing conditions fit into the mix and more.

Imagine signing up for an amazing new health insurance policy, excited to take advantage of all the benefits it offers you. But then, reality hits when you see there’s a waiting period you have to serve first. These sneaky little timeframes are part of most policies, and you won’t be able to actually use your private health insurance for specific treatments or services until they’ve elapsed. They’re like a cooldown period before your coverage kicks in. But despite the initial frustration, know that these waiting periods do serve a purpose: they keep the system fair and prevent cheeky tactics that could skyrocket everyone’s premiums.

You should also know that there are different waiting periods for different services. Hospital waiting periods are pretty standard across the board, but extras can be different for everyone. Different insurers have their own rules for extras waiting periods, so you’ll need to take a look at your PDS to understand just how long you’ll be waiting.

Think of waiting periods like the policy’s gatekeepers – making sure you’re not sneaking in to grab the benefits, then leaving your policy high and dry. Without waiting periods, anyone could get insured, schedule expensive treatments and then disappear without paying their fair share. This result would be insurers hiking up premiums for everyone, and nobody wants that!

The good news is you won’t always be kept waiting. If you switch to a new health insurance policy at the same level as your previous one or lower, you can often skip some waiting periods you've already served. However, if you decide to go up a tier or change insurers, you'll need to wait it out for the new or upgraded services.

Hospital waiting periods set the rules for how long you need to sit around before your private health insurance can swoop in to the (financial) rescue.

The waiting periods for hospital cover are relatively consistent across all health insurers, thanks to the rules laid down in the Private Health Insurance Act 2007. In the table below you’ll see some of the maximum waiting periods for various hospital treatments, according to the Private Health Insurance Ombudsman.

Extras cover takes care of those little (and not-so-little) health needs outside of standard hospital insurance. Whether you need some physical work done by a physiotherapist, need a new pair of glasses or are considering orthodontics for that winning smile, extras cover is what you’ll want to take out.

But there’s a catch: extras also come with their own waiting periods, and some of them can last quite a long time. Here are just a few of the most common extras services and their maximum waiting periods:

A ‘pre-existing condition’ is a health issue that you had signs or symptoms of during the six months before you joined a hospital policy or upgraded to a higher tier of cover. It’s important to note that you don’t need an official diagnosis or prior knowledge of the condition for it to be considered pre-existing.

For hospital cover, you’ll typically face a 12-month pre-existing waiting period for these conditions, but there are exceptions to this rule. Notably, psychiatric care, rehabilitation and palliative care are subject to a maximum wait period of two months, even if they involve pre-existing conditions.

If you’re switching health providers but have already served waiting periods for a comparable or lower level of cover, these periods should carry over. But if you're upgrading your policy or adding new features, you may still need to serve waiting periods for the additional services or higher level of coverage.

Understanding the nuances of waiting periods for pre-existing conditions is essential to make informed choices about your health insurance and when to seek specific treatments. It’s always a good idea to speak to your insurer for personal guidance based on your unique circumstances.

Health funds sometimes offer waivers for waiting periods, but the rules governing these waivers are quite specific. Generally, health insurers may waive waiting periods, mostly for general treatment (extras) services, as a promotional incentive to attract new members.

While waivers can apply to some extras, like general dental or physio, it’s pretty uncommon for insurers to bypass the 12-month waiting periods for pre-existing conditions, obstetrics or major dental procedures.

Each health fund will have its own policy around waivers, so always read the fine print of your PDS to know when, where and how waiting periods might be waived. Keep in mind that even if a waiting period is waived, it doesn’t automatically transfer loyalty limits and accrued benefits from your previous insurer.

If you’re considering health insurance and want to minimise the waiting periods, compare your options and check out any promotions that might be running. And also ask insurers directly about their specific waiver policies.

While private health insurance waiting periods can be waived in specific circumstances for extras, the general rule is that most health insurance providers in Australia will include some waiting periods for their policies. These periods can vary between providers and the services you want covered. For some services, waiting periods can be as short as two months (or less), while others, like major dental procedures or orthodontics, could see you waiting for up to three years.

Unfortunately, it's extremely rare for insurers to completely eliminate the 12-month waiting periods associated with pre-existing conditions, obstetrics or major dental work. So when choosing your health fund, make sure these waiting periods align with your healthcare expectations.

The truth is that waiting periods are in place for one very good reason: to ensure fairness and affordability for all policyholders. While they might seem like an inconvenience, they play big part in preventing misuse and maintaining the stability of the healthcare system.

By knowing how waiting periods work and exploring options with shorter waiting periods, you can make the most of your private health insurance. Just make sure to review your policy documents regularly and speak to your provider about specific waiting periods that apply to your cover.