What’s covered and what should you look for in a policy? 


Millions of Australians live with some form of mental illness and it’s troubling to know that these numbers are only increasing. A recent joint study by Mission Australia and Black Dog Institute found that almost one quarter of young Australians (22.8%) show signs of having a probable serious mental illness. With wage growth at an all-time low, being able to afford the treatment you need is important.


The good news is that unlike other forms of insurance in Australia, private health insurance is community rated. This means that every Australian has access to health cover at the same price, even if they have a pre-existing condition such as a mental illness. It also stops health funds from being able to discriminate against people seeking cover and rejecting them on the basis of an existing condition.


But what am I covered for?

Mental health cover can include the following services:

  • Psychology services
  • Hypnotherapy services
  • Pharmaceuticals
  • Broader health programs
  • In-hospital psychiatric services and rehabilitation


What policy do I need?

Private health insurance is broken up into two general cover types: hospital and extras. The services you want to claim for will determine the type of policy you need.


Extras cover

If you’re after cover for psychology services, you’re going to need extras cover. These benefits will have an annual limit. Make sure you check the per person limit, the maximum benefit amount and whether it’s a combined limit – psychology and hypnotherapy are generally lumped together.


Cover for pharmaceuticals can be helpful, as it allows you to claim some money back for certain non-PBS medications.


Check to see if your extras policy covers broader health programs. These can include services such as stress management courses, which can help you to work on certain mental health issues like anxiety. Benefits for these services are separate from your psychology cover.


Hospital cover

If you’re after in-hospital psychiatric care and rehabilitation, you’ll need hospital cover. Unfortunately, these policies often only provide limited benefits, with low annual limits and significant out-of-pocket costs (if the service is listed as a “restricted benefit”).


What do I need to look for when comparing policies?

As with any financial product, the devil is in the detail. Here are some things to check when reviewing a policy:

  • Restricted benefits. The government dictates minimum benefit levels. If your policy only offers a “restricted benefit” for a particular service, it means the fund will only pay the minimum amount required by law.
  • Waiting periods. A waiting period is the minimum amount of time you need to have had your policy for before you can claim any benefits. When claiming psychiatric treatment through private health insurance, the maximum waiting period is two months, even for pre-existing conditions.
  • Policy limits. A policy limit is the maximum amount you can claim for a service. These can be presented as either annual limits, which is the maximum amount you can claim in a year either per person or per service, or combined limits, which is the maximum amount you can claim for a group of services within your policy.
  • Exclusions are situations in which your fund won’t pay a benefit. These can include treatments received overseas, treatment from non-registered providers and treatments or procedures that aren’t medically necessary.


If you need help comparing your options, jump online and take advantage of a good comparison service or website. By doing so, you’ll be able compare policies and filter the results by the services that matter most to you.


Richard Laycock is a health insurance expert at finder.com.au, Australia’s most visited comparison website. Ironically, he’s a man of few words.