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Health insurance waiting periods explained

25 November 2014 - 10:27am

If you have to make a claim towards the beginning of your health insurance policy, you may wonder why there are periods where it seems like you are being denied the service you've paid for. To better educate policy holders, the Private Health Insurance Ombudsmen has recently outlined the key reasons why you can be left in limbo.

Waiting periods

Waiting periods exist to limit opportunities for people to abuse the system. Health insurers are not allowed to discriminate against individuals whether they think they are more likely to make a claim or not. However, the waiting period is a way in which they protect themselves from people who need immediate treatment and have no intention of maintaining their cover.

If there were no waiting periods, people could take out policies only when they thought they would need hospital treatment and then cancel them soon after. This could then lead to increased premiums for long-term policy holders, creating an imbalance in the very idea of how the health insurance industry is supposed to provide coverage.

Industry standards

Most policies will have a similar general waiting period of around two months for hospital treatment and extras cover. However, as an incentive for new customers, private health cover may offer different periods of grace depending on the health fund. This is why it can be imperative to seek the advice of experts such as HICA before you take out a policy.

The variety of extras coverage offered by some private providers means that basics such as dentistry and physiotherapy can require a wait of a few months, whereas complex ailments that require costly treatments can lead to a wait of up to 12 months or more for hospital cover before a claim can be made.

Other limitations

Some insurers will offer benefit limitation periods as part of their hospital cover. These are the initial part of the policy in which only a stipulated minimal benefit is payable. Depending on the type of policy and condition, these periods can last for one to three years.

These are not necessarily the standard waiting periods which apply to all policies, so if yours does feature one, your insurance company is obliged to make sure you're aware of it before you enter into any contract.

Health insurance waiting periods can be incredibly varied and complex - and are often buried in the fine print of policies. If you would like help finding a policy which has the right waiting period for your needs, call HICA on 1300 44 22 01 for expert, impartial advice.