If you’ve recently moved to Australia to work or live, navigating the healthcare system can feel like learning a whole new language. From bulk billing to waiting periods, there are plenty of health insurance terms you’ll encounter when researching or using health insurance — and understanding them can save you both confusion and unexpected costs.
Below, we’ll explain the most common Australian health insurance terminology in simple, plain language so you can make informed choices, avoid surprises, and feel confident about managing your health while you’re here.
Waiting Period
A waiting period is the length of time you need to wait before you can claim certain benefits on your health insurance policy. For example, you might have to wait 12 months before claiming pregnancy-related services or treatment for pre-existing conditions.
The purpose of a waiting period is to prevent people from taking out insurance just to cover an immediate, expensive treatment and then cancelling it.
Learn more about waiting periods here.
Claim
A claim is a request you make to your health insurer for reimbursement or payment of a medical service or treatment you’ve received. Depending on your policy and the service, your insurer may pay the full amount or just a portion of it.
For example: if you see a doctor and pay $100, you can submit a claim to your insurer if that service is covered, and they’ll reimburse you according to your policy’s rules.
Extras Cover
Extras cover is health insurance that helps pay for services not usually covered by hospital insurance — like dental, optical, physiotherapy, and chiropractic care.
It’s sometimes called “ancillary” cover and is especially useful if you expect to use these kinds of services regularly.
Excess
An excess is the amount of money you agree to pay out of your own pocket if you’re admitted to hospital, before your insurer starts covering the costs.
For example: if your excess is $500, and you have a hospital stay that costs $5,000, you’ll pay the first $500, and your insurer pays the rest (subject to policy limits).
Premium
Your premium is the regular payment you make to keep your health insurance policy active. Depending on your insurer and the level of cover you choose, this could be paid weekly, fortnightly, monthly, or annually. It’s essentially the price you pay for your insurance.
Inpatient vs. Outpatient
These two terms describe the type of medical care you receive:
- Inpatient: You’re admitted to a hospital for treatment and stay overnight (or longer).
- Outpatient: You receive medical treatment without being admitted to hospital. For example, visiting a doctor’s clinic for a consultation or having day surgery.
Bulk Billing
Bulk billing means that your healthcare provider accepts the Medicare benefit as full payment for your treatment, so you don’t pay anything out of pocket.
This is common for general practitioner (GP) visits in public clinics. If a doctor does not bulk bill, you’ll need to pay the difference between their fee and the Medicare rebate.
Pre-existing Condition
A pre-existing condition is any illness, ailment, or condition you had symptoms of or were treated for before taking out your current health insurance policy. Many insurers apply waiting periods before they cover treatment for pre-existing conditions.
Here’s what you should know about pre-existing conditions and OVHC.
Medicare
Medicare is Australia’s public health care system, which provides free or subsidised treatment by health professionals and in public hospitals for Australian citizens and some residents.
Visitors to Australia usually need to rely on private health insurance or OVHC, unless they’re from a country with a Reciprocal Health Care Agreement.
Here’s everything to know about Medicare and how this service differs from private health insurance.
Medicare Levy Surcharge (MLS)
The Medicare Levy Surcharge (MLS) is an additional tax that higher-income earners in Australia pay if they don’t have private hospital insurance. It’s designed to encourage people to take out private health cover and reduce pressure on the public system.
Medicare Benefits Schedule (MBS)
The Medicare Benefits Schedule (MBS) is a list of medical services that Medicare covers, along with the amount it pays for each service.
Doctors and hospitals can use the MBS to set their fees, and it helps you understand how much you might get back from Medicare or your insurer.
Hospital Cover
Hospital cover is private health insurance that helps pay for hospital treatment as an inpatient.
It typically covers things like accommodation, theatre fees, and some doctor fees when you’re admitted to hospital — either as a public or private patient, depending on your policy.
Ambulance Cover
In most Australian states and territories, ambulance services are not free unless you’re covered by insurance.
Ambulance cover helps pay for emergency ambulance transport and treatment, which can otherwise cost hundreds or even thousands of dollars.
Out Of Pocket Costs
Out of pocket costs (also called a “gap”) are the expenses you have to pay yourself after your insurer and/or Medicare have paid their share of your medical costs.
For example, if a doctor charges more than the MBS fee and your insurer doesn’t cover the extra, you’ll need to pay the difference.
Pharmaceutical Benefits Scheme (PBS)
The Pharmaceutical Benefits Scheme (PBS) subsidises the cost of many prescription medicines in Australia.
If you’re eligible (through Medicare), the PBS reduces the price you pay for medicines listed on the scheme.
Private Hospital
A private hospital is owned and operated independently of the government and offers more flexibility and comfort, like choosing your own doctor and having a private room.
Treatment here is usually funded by your private hospital cover and/or out-of-pocket costs.
Public Hospital
A public hospital is funded by the Australian government and provides free or low-cost treatment to patients covered by Medicare.
As a public patient, you may have to wait longer for non-urgent care, and you won’t get to choose your doctor.
Reciprocal Health Care Agreement
A Reciprocal Health Care Agreement (RHCA) is an agreement between Australia and certain countries that allows visitors to access essential medical care under Medicare while in Australia.
If you’re visiting from an RHCA country, you may not need full private insurance, but you should still check what’s covered.
Learn more about RHCAs for overseas visitors.
Conclusion
Understanding the language of Australia’s healthcare system makes it much easier to choose the right insurance, use it effectively, and avoid unpleasant surprises when you need medical care.
From waiting periods to out-of-pocket costs and everything in between, these common health insurance terms give you a solid foundation for navigating both private and public healthcare in Australia.
Read more into how Australia’s healthcare system works for overseas visitors.