What to consider when choosing your excess or co-payment

The world of insurance can be full of words which might sound a bit like industry jargon at first. But once you begin to understand their meaning, you’re in a great position to make empowered decisions for yourself and your family. You might have seen the terms ‘excess’ and ‘co-payment’ when reviewing and researching different Hospital cover. So, what do they mean and how can you use them to lower the cost of your cover?

By having an excess or co-payment on your hospital cover, you can help keep the premiums down, because you are contributing a small amount towards the cost.

An excess is a dollar amount which you will have to pay in case of a hospital admission. The admission could be for a day procedure or an overnight stay. You pay the agreed-upon excess upfront to the hospital at time of admission towards the accommodation cost and the hospital bills, then the health fund pays the remainder of the accommodation cost.

A co-payment is a daily amount that you contribute for each night you stay in hospital. This might be capped depending on the product.

Co-payments and excesses have been available on Hospital cover for some time. However, the Australian Government has agreed to permit private health insurers to offer Hospital cover with new higher excesses. This allows members to swap higher excess levels for lower premiums. The premium is the amount you pay to your health fund for your cover.

If you are looking to keep some more dollars in your pocket each month and stretch your budget further, could a higher excess or co-payment be right for you?

Here are some points to think about when choosing your excess and co-payment level on Hospital covers:

• Would having to pay a higher level of excess put you under financial strain? The excess amount is usually required by the hospital upfront before treatment begins.
• It’s impossible to predict the future - but consider your history of claiming and likelihood of needing to be admitted to hospital.
• If you have a family, chances of needing hospital treatment may increase simply due to the policy covering more people.
• Does the cover you have, or you’re looking at, have a cap on how many times a year you would need to pay an excess?
• Does the cover you have, or you’re considering, have a cap on the number of days per calendar year you’d need to pay a co-payment?

CBHS Health Fund offers excess and co-payment options

From 1 April 2019, CBHS will offer an increased $750 excess for singles and $1,500 excess for couples and families on selected products.  The excess is only payable once per person per calendar year and applies to all members excluding dependants*. We also continue to offer daily co-payment options of $70 or $100 on selected products. Our CBHS Member Care team can advise you on which products we offer that have excess options, co-payment options or both, and help you decide on the right cover for your personal situation.

*for $750 Excess (Gold).

Want to know more?

Read our FAQs about the Australian Government private health insurance reforms.
Visit the Department of Health website.
Research and compare our Hospital cover products