Common private health cover terms explained

Published June 2024 | 5 min read
Words by Lucy E Cousins

Health cover can be confusing and full of jargon. We’re keeping things simple with this no-nonsense guide to help you decode some of the most common terms.   

At HCF, we understand some of the language around private health insurance can be confusing. That’s why we like to keep it simple – we want you to get even more value for your cover by helping you to understand the most common words and phrases we use to describe how your health cover works.    

• Accident safeguard: Eligible HCF members receive our top level of hospital cover^* for up to 90 days if you’re in an accident. This means you’ll be covered for services that are normally excluded or only entitled to minimum benefits under your cover – even in a participating private hospital. Read more about Accident Cover – conditions apply.
• Annual limits: Also known as an ‘annual maximum’, this is the benefit limit that you can claim on a particular extras service within one calendar year. Every calendar year, your benefit limit for each service your health fund covers is renewed, regardless of how much you claimed on that service during the previous year. The range of services depends on your extras cover (see below) and could include things like dental, physio or eyecare.
• Australian Government Rebate: The Australian Government Rebate (AGR) is a percentage reduction in premiums to help cover the cost of hospital private health insurance. It's calculated based on your income, age and family status. The AGR is reviewed by the government annually and may change on 1 April.
• Benefit: This is the dollar or percentage amount you can claim from your private health insurer for a specific service covered by that insurer. Each service covered will have an annual limit (see above) for the maximum that you can claim.
• Claim: A claim is a request that you make to your health fund to pay for part or all of a service that’s covered in your policy.
• Dependents: There are three kinds of dependents: child dependent (0 to 21 years), adult dependent (22 to 30 years) and student dependent (22 to 30 years). Each of these dependents must be unmarried and not de facto, must rely primarily on you for maintenance and support, and must be related to you as a child, stepchild, foster child or other child that you or your partner has legal guardianship over.
• Excess options: When you get hospital cover, you'll be asked to nominate an excess amount. This is your contribution to your hospital treatment, and you can choose from a range of set excess amounts. Your choice of excess will affect the price you pay for your insurance policy. The excess is paid once per person per calendar year to a maximum of two times on a policy.
• Extras cover: Also known as ‘ancillary cover’, extras cover helps with the cost of everyday healthcare services. These can include dental, optical and physio, and even some health programs, depending on your insurer. A benefit can't be received for a service where Medicare has also paid fully or partially for the service.
• No-Gap network: Our No-Gap network^{^} is a community of providers where HCF members can receive 100% back on eligible extras treatments covered under their policy including dental check-ups or a first visit to physios, chiros, osteos or podiatrists.
• General dental: As opposed to major dental (see below), general dental normally refers to routine dental procedures with prevention in mind, like check-ups, scale and clean, basic fillings, extractions, fluoride treatments and X-rays.
  
• Health programs: Some health funds may offer wellbeing and mental health programs to support members in their health journey. HCF provides eligible members access to a range of mental wellbeing support, chronic disease prevention support, and family and children support programs – for example, the CSIRO Total Wellbeing Diet, Sleepfit app^#, and The COACH Program^®**, a telephone support program for eligible members with heart conditions or diabetes that can help improve your heart health.
• Hospital cover: This type of cover helps with the costs of treatment and in-hospital costs as a private patient in hospital. Services including surgery, anesthesia, private rooms and theatre fees are generally covered by private health funds. HCF also provides a range of value-adds to complement your hospital cover, including Accident Safeguard and access to free health programs.
• Inclusions/exclusions: Nearly every health fund will use these terms in their policies to indicate which hospital services are covered (inclusions) and which aren't covered (exclusions).
• Informed financial consent: An Informed Financial Consent is a document that you should receive before a treatment/service is completed in hospital so you understand what and if there will be any out-of-pocket expenses. It will outline the Medicare Benefit Schedule fees for particular Medicare procedures you are receiving, and the doctor and anaesthetist fees.
  
• Inpatient and outpatient: The main difference between being an inpatient and being an outpatient is being formally admitted to receive treatment or care in hospital. You’re considered an outpatient if you go to hospital for treatment provided by someone other than a hospital, like X-rays or blood tests, and without being admitted to hospital.
• Lifetime Health Cover (LHC) loading: A government initiative, the LHC is designed to encourage Australians to take out private health insurance earlier in life and maintain cover as they age. After the age of 30, if you don’t have private health insurance, you'll be charged an extra 2% on premiums for every year you delay being insured if you take out private health insurance. After 10 years of having continuous health cover, your loading is removed.
• Major dental: Major dental refers to more complex dental surgeries and procedures, like teeth extractions, crowns, dentures and root canal.
• Medicare levy: To help fund Australia’s public healthcare system, the government applies a 2% levy on your taxable income. You can apply for a reduction or exemption depending on your circumstances.
• Medicare levy surcharge (MLS): Separate from the Medicare levy, the MLS is a levy applied to Australian taxpayers who earn a high income but don’t have private hospital cover. Read more about how the MLS works.
• Mental health: Defined as a state of mental wellbeing that enables people to cope with the stresses of life. HCF offers a holistic range of mental health and wellbeing programs with access to options for all ages at no extra cost, as well as selected extras products that include cover for mental health services^{^^}.
• Minimum (or restricted) benefits: This is the lowest amount that a health fund is expected to pay for a hospital visit as required by the Australian Government.
• Out-of-pocket costs: Also known as the ‘gap’, these costs refer to the difference between what your doctor charges for a service and what Medicare and your insurer will pay for that same service. It can also refer to the difference between the costs charged by a hospital (for services such as accommodation, nursing and theatre room) and what your insurer pays for those services. You’re required to pay any out-of-pocket costs directly to the health service provider.
  
• Participating provider: HCF members can avoid large gap payments by choosing a doctor who participates in the HCF Medicover scheme. To find one, use our Find a Provider tool.
• PBS-equivalent co-payment: The Pharmaceutical Benefits Scheme (PBS) is a government program that subsidises medicines to make them more affordable. However, patients are required to pay a set amount towards each item, known as a co-payment. The amount of the co-payment is adjusted around 1 January each year. The PBS-equivalent co-payment does not apply to vaccines.
• Pre-existing conditions (PECs): This refers to any signs or symptoms of a condition, illness or ailment that you had six months before (or on the day of) signing up to a health insurance policy, or before you upgrade to a higher level of cover or reduce your excess. The condition is considered ‘pre-existing’, even if no diagnosis was made before your cover started.
• Restricted services: These are treatments or services that your insurer will only pay partial benefits for, meaning there will be out-of-pocket costs (see above). Restricted services may include rehabilitation, hospital psychiatric services and palliative care.
• Waiting periods: Waiting periods are an initial length of time after signing up to an insurer when no benefits are payable for certain procedures or services, like childbirth or knee replacements. Waiting periods protect existing members and reduce the rate of premium increases in the long run.

Getting the most out of your health cover 

We’re always looking for ways to innovate and help you be your healthiest self. We give back to members in ways big and small, helping you find value in your health cover. Give our friendly team a call on 13 13 34 to make sure you’re on the right cover for you. Discover how HCF is helping to support you and your family, by putting its money into improving the health of our members.