What you need to know about private health insurance

In Australia, if you have citizenship or a permanent visa you can access health care services under Medicare. Medicare eligibility may also be provided on an interim or limited basis to certain non-residents, based on their country of origin or visa status.

However, Medicare doesn’t cover everything so there are many benefits to having access to the private health system. With private health insurance you can claim back some or all of the costs associated with your healthcare that you can’t claim through Medicare.

In addition, you can benefit by reducing the cost of a range of extras services including physiotherapy, massage and other therapies; avoid government surcharges, LHC loading and long public hospital waiting lists; and choose your treating doctor.

What is the Pharmaceutical Benefit Scheme?
The Medicare Benefits Schedule explained
Health care for non-Australians
Does the Medicare Levy Surcharge apply to me?
What level of cover must I have to avoid government surcharges?
What Tax Information does GU Health send to the ATO?
Will I have to pay Lifetime Health Cover loading?
What are Private Health Insurance Statements (PHIS)?
Can I claim the Australian Government Rebate on Private Health Insurance?

The Pharmaceutical Benefit Scheme (PBS) gives all Australians and eligible visitors access to more than 2,600 prescription medicines that are subsidised by the government. The scheme aims to increase the accessibility of medications for Australians.

All you need when you visit the pharmacy is your:

  • Medicare card
  • Services Australia or Department of Veterans’ Affairs’ (DVA) concession card (if you have one)
  • PBS Safety Net card (if you have one).

Once you or your family reach your Safety Net threshold, you can get a PBS Safety Net card from your pharmacist. This means your PBS-listed medicine will be cheaper, or free, for the rest of the calendar year.

The Medicare Benefit Schedule (MBS) is a list of medical procedures, consultations and tests that are subsidised by the Australian Government through Medicare. The MBS specifies fees for each of the listed services and these fees are considered somewhat like a ‘recommended fee'.

Under Medicare and the MBS:

  • If you attend a public hospital, you’ll not be charged for care and treatment or aftercare relating to your public hospital treatment.
  • If you are accessing treatment in a private hospital, Medicare will rebate 75 per cent of the schedule fee for services provided.
  • As a member with GU Health, you may be able to claim back some of, or the entire amount you paid for your accommodation as a private patient as well as the remaining 25 per cent of the MBS fee for in-hospital medical treatment. You may also be able to claim back the amount your health practitioner charges above the MBS fee, known as ‘the gap’.
  • Outpatient services are only claimable through Medicare and not covered by your private health cover. This may vary if you have a non-resident cover.

In addition to the fact that some healthcare services are not fully covered by Medicare, there are other benefits to having private health insurance.

What are outpatient services?

Outpatient services are medical procedures or tests that don't require an admission. They can include things such as:

  • Consultation fees for doctors, including specialists
  • Tests and examinations by doctors that are needed to treat illnesses, such as x-rays and pathology tests
  • Eye tests performed by optometrists.

Individuals who have an Australian working (subclass 482) visa are subject to conditions that require them, and their accompanying family members, to maintain adequate health insurance arrangements for as long as they are in Australia.

All GU Health non-resident covers meet the conditions required. As evidence of your cover, we will supply you with a letter that you can provide to the Department of Immigration and Border Protection.

If you’re from a country which has a Reciprocal Health Care Agreement (RHCA) with Australia, you may be eligible to access Medicare. For further information you should refer to Services Australia information about RHCA countries.

For more information on what you are covered for with GU Health, see the non-resident section of our website.

Did you know?

GU Health is the only Australian health fund offering a streamlined non-resident RHCA health cover designed to ensure you can apply for exemption from the Medicare Levy Surcharge without the need to purchase additional cover components.

You will need to pay the Medicare Levy Surcharge (MLS) if you're an Australian taxpayer earning above a certain income and you don’t have an appropriate level of hospital cover for you and all your dependants with a registered health fund such as GU Health. The MLS is paid in addition to the Medicare Levy payable by most taxpayers. The penalties that apply if you don't have private health insurance are as follows:

Medicare Levy Surcharge (MLS) thresholds effective
1 April 2021

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first. Rebate levels are adjusted annually on 1 April based on the Rebate Adjustment Factor.

To find out if the MLS applies to you, as well as the surcharge rate you may have to pay, please click through to the ATO’s Medicare Levy Surcharge Income Calculator.

Please refer to privatehealth.gov.au for further information about the Medicare Levy Surcharge in relation to private health insurance.

At GU Health, we make it easy. All our resident hospital covers are complying health insurance products (CHIP), which means you can be assured your GU Health hospital cover won’t result in surcharges.

This is also the case for many of the non-resident covers GU Health provides to members who come from Reciprocal Health Care Agreement (RHCA) countries.

Each financial year your health cover information will be sent to the Australian Taxation Office and will be available to you or your registered tax accountant to view when submitting your tax return.

Non-RHCA covers do not provide a tax exemption: only GU Health members who are not covered under Medicare should hold this type of cover.

Every year, by 15 July, GU Health provides the ATO with health policy information for all members on a CHIP. The information is provided for every adult on the policy, while children are represented within the adult’s information.

This information shows how many days in the year you were covered by private health insurance. If you or your dependents were not covered for a period of time within that year, a tax liability for each day that you did not have cover, known as Medicare Levy Surcharge loading, may apply.

The tax information also indicates to the tax department how much rebate you’ve claimed and whether you’ve claimed the appropriate amount for your income. This could result in either a tax liability or a tax credit when you submit your tax return. You can find out more about the Australian Government Rebate on Private Health Insurance at Can I claim the Australian Government Rebate on private health insurance

Quick Tip

At GU Health, we make it easy. All our resident hospital covers are complying health insurance products (CHIP), which means you can be assured your GU Health hospital cover won’t result in surcharges.

Depending on your age and how long you’ve held private hospital insurance, you may be required to pay Lifetime Health Cover (LHC) loading. To avoid paying this loading, you need to purchase hospital cover by 1 July in the year following your 31st birthday. Purchasing hospital cover after this date may mean that you’ll need to pay LHC loading — 2 per cent for each year you're over 30.

You're entitled to accumulate a period of 1,094 days without cover, in your lifetime, and not affect your LHC status, provided you resume your cover. This is known as 'days of absence'. Periods of suspension and overseas travel (in excess of 12 consecutive months) are also exempt from LHC, as in these instance you are considered to be maintaining your cover.

As a new migrant to Australia, you have until either 1 July following your 31st birthday or the anniversary of the day you registered for full Medicare benefits (whichever occurs last) to take out hospital cover and avoid LHC.

Once you’ve paid LHC loading on your private hospital insurance for 10 continuous years, the loading is removed provided you retain your hospital cover.

If you’re transferring to GU Health from another registered health fund, you can obtain a Transfer Certificate from your former fund upon cancelling your policy. This will be used to confirm you’ve had continuous cover.

Also keep in mind that each year we will send you an LHC Statement if you have LHC loading on your policy. This is for your information only and you’re not required to do anything with it.

Detailed information about LHC, including exemption categories, is available from the PHIO website.

So that you can understand your cover and compare cover easily, GU Health provides you with a Private Health Insurance Statement (PHIS) every year and every time you make a change to your cover. The PHIS replaces the Standard Information Statement (SIS) previously in use prior to 1 April 2019.

This will become the standard template used by the industry so it will only provide generic information about your cover and won’t reflect specific details such as any discounts or LHC loading.

You don’t need to take any action when you receive your PHIS but we do encourage you to review your current level of cover to ensure it will meet your needs into the future.

Families and individuals who are eligible for Medicare and pay private health insurance contributions on an appropriate hospital or extras cover may be eligible for the Australian Government Rebate on Private Health Insurance. The rebate can help to reduce your contributions.

The level of rebate that you're entitled to claim is based on the age of the oldest person covered by the policy and by your family’s annual earnings. These are set out in tiers.

Income thresholds effective from 1 July 2021 Income threshold table_condensed_Sept2020

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first.

You can receive the rebate as a reduction on your GU Health contributions or as a tax rebate when lodging your tax return; that is unless an arrangement specific to your corporate health plan has already been set up by your employer.

Rebate % by age group effective from 1 April 2021 to 31 March 2022 GU - PICTURE - AGR table - April 2021

Note: Single parents and couples (including de facto couples) are subject to the family tiers. For families with children, the thresholds are increased by $1,500 for each child after the first. Rebate levels are adjusted annually on 1 April based on the Rebate Adjustment Factor.

If an incorrect rebate is claimed, the balance will be corrected through your tax return. For more details about the rebate, please contact Services Australia on 1300 554 463.