What is hospital excess and how does it work?

Published November 2024 | 4 min read 
Words by Carrie Hutchinson 

Choosing a higher excess lowers your hospital cover premium, but is it right for you and your family? Here's what to weigh up when deciding. 

No one ever wants to think about spending time in hospital, but it can happen to the healthiest of us. Accidents, illness, elective surgery and life changes, like having a baby, can all require a visit to hospital. Having private hospital cover as part of your health insurance can help reduce many of the costs associated with accessing the private hospital system.

What is hospital cover?

Hospital cover helps reduce hospital fees and allows you to choose your preferred doctor – for example, an orthopaedic surgeon or obstetrician – when you’re undergoing treatment in a private hospital.

For any treatments listed on your cover, HCF hospital cover includes:

• accommodation charges (less your excess) for either overnight or same-day stays
• theatre and critical care fees
• intensive care and neonatal intensive care
• prostheses up to the amount on the government prostheses list
• emergency ambulance (depending on your state or territory).

To find out what isn’t included in your hospital cover, check your cover details in the My Membership app or online member services.

What is hospital excess?

A trip to a private hospital will typically involve paying an excess. An excess is a non-refundable amount of money you agree to pay towards the cost of your hospital treatment before your health fund pays benefits to you.

There are exceptions to this – for instance, if you’re admitted to hospital for treatment after an accident and your cover has Accident Safeguard. Depending on your level of cover, you may also avoid paying an excess for same-day admissions. Children under the age of 25 pay no hospital excess, no matter how many times they go to hospital^*.

How to choose a hospital excess

When you’ve decided the level of hospital cover you need, you’ll have to select your excess level. This can range from $250 to $750 for singles and up to $1,500 for family cover.

The maximum levels were increased by the government in 2019 as part of its private health insurance reforms. Generally, it allows consumers to choose a higher excess in exchange for lower hospital cover premiums.

Deciding what level of excess is right for you and your family will largely depend on your circumstances. If you can afford to pay the highest excess, then it's worth considering taking that option.

You might consider choosing a higher excess if you:

• are young and generally in good health
• don’t think you’ll need to go to hospital in the coming 12 months
• want a lower premium.

A lower excess may suit those who:

• have pre-existing health conditions
• have a history of hospital visits
• plan on having treatment in hospital in the future
• can’t afford a high upfront fee when going to hospital.

When do you pay hospital excess?

Excess is paid directly to the hospital, usually on the day of treatment or when you book your treatment. Once your excess has been paid to the hospital, you’re then covered by your private hospital insurance (although you may incur some out-of-pocket expenses), and Medicare.

You’re also only required to pay the excess once a year for each person listed on the premium. If you have to go back to hospital multiple times in a single calendar year, even for a completely different reason, you’ll only pay the excess once.

Do you have to pay hospital excess for day surgery?

Depending on your level of hospital cover, you won’t have to pay an excess for day surgery, even if you need to have multiple treatments throughout the year.

Can I change my hospital excess level?

You can change the level of excess you chose when first taking out your private health cover at a later date, however there may be a waiting period if you’re reducing your excess.

If you're an HCF member, call 13 13 34 to speak to our team about changing your excess.

How do I reduce my out-of-pocket hospital costs?

As well as choosing a lower hospital excess, there are other ways you may be able to save on out-of-pocket medical expenses. Ask your GP to recommend two or three specialists, so you can compare costs using our Find a Provider tool before deciding and reduce the gap (the difference between what you pay for your specialist/doctor and what you can claim).

The Find a Provider tool helps you find a healthcare provider who’s more likely to offer a no-gap or a known-gap (capped at $500 per specialist) service when you're admitted to hospital.

Options for treatment at home^{^} can also lower or avoid hospital costs.

If you’re wondering about other ways to reduce the cost of your treatment or ensure that you have adequate cover for your life stage, you can get in touch to discuss your options.

Choose the best HCF cover for you

When it comes to choosing your hospital cover with HCF, head to the quote tool to make sure you find the right cover to suit your needs. Or you can chat to our team. We’re here to support you on your health journey.