What is hospital excess?
A hospital excess is the amount of money you agree to pay if you are admitted to hospital as a private patient for treatment, similar to the excess you have on your car or home insurance.
An excess applies to your hospital accommodation and theatre costs. It does not apply to and any doctors’ fees you may incur during your stay.
The hospital may request payment of the excess amount either before you are admitted or at the time of admission.
How does it work?
Your excess is chosen when you determine your level of private health insurance cover and can range from $0 to $750.
For example, if you take out a Superior Gold 300 policy, your overnight hospital excess is $300. If you are having same-day treatment, your excess for the same policy will be $150.
The good news is there is no excess on child dependants covered on your policy, meaning if your child goes to hospital for treatment, you do not have to pay this amount.
An excess does not apply to General Treatment services like dental, optical or physiotherapy appointments.
How often do I have to pay it?
You will only need to pay your full excess amount once per calendar year.
However, the excess you pay for treatment may be made up of smaller payments for same-day treatment, which is payable for each same-day admission until you reach your full excess amount.
For example, with a Superior Gold 300 product, you would need to pay two excess amounts of $150 to make up your total excess of $300.
If you go to hospital for a same-day admission and pay an excess of $150, and then were required to stay overnight, you would only pay the remaining $150 for the overnight admission, totalling $300 for the year.
If you do not go to hospital in a calendar year, you do not pay this amount meaning the money stays in your pocket.
If you have already paid your excess on your policy for the year and then decide to change your level of cover, you may be required to pay the difference between the excess already paid and your new excess for a new hospital admission during the same year.
Can I choose a different excess?
Having a higher excess will reduce your premium.
While there is no way of knowing if you will need to go to hospital, it is important to consider a couple of points when deciding what excess to take. Firstly, are you young and healthy? And do you think it is unlikely you will end up in hospital? Secondly, can you afford to cover the excess if you are hospitalised?
A lower excess means you will pay less if you claim but your premium amount will be higher than if you choose a higher excess.
You may want to consider a lower excess if you have a history of ill health and have made multiple hospital claims in the past. You may also want to consider a lower excess if you feel that your financial situation means you may not be able to afford to pay an excess if you go to hospital.