The Times Australia
The Times World News

.

Will my private health insurance cover my surgery? What if my claim is rejected?

  • Written by Yuting Zhang, Professor of Health Economics, The University of Melbourne

The Australian Competition & Consumer Commission (ACCC) has fined Bupa A$35 million[1] for unlawfully rejecting thousands of health insurance claims over more than five years.

Between May 2018 and August 2023 Bupa incorrectly rejected claims from patients who had multiple medical procedures, with at least one of those procedures covered under their health insurance policy.

Instead of paying the portion of the treatment that was covered, Bupa’s automated systems wrongly rejected the entire claim.

Bupa admitted these errors were due to system problems and poor staff guidance, and has started to recompensate members[2].

So you may be worried whether your private health insurance will cover you for the procedures you need.

Here’s what you need to know about the different types of hospital cover. And if your claim is rejected, what to do next.

From basic to gold

As of March 2025, 45.3% of Australians[3] have private health insurance for hospital cover. There are four tiers: basic, bronze, silver and gold[4].

Each tier has a minimum set of “clinical categories[5]”. These are groups of hospital treatments that must be covered.

For example, basic hospital cover only has three mandatory inclusions: rehabilitation, hospital psychiatric services and palliative care. But this is “restricted” cover, meaning patients will often still have to pay substantial out-of-pocket costs for these services.

Basic cover is entry-level cover, mainly for people who want to avoid the Lifetime Health Cover loading[6] and the Medicare Levy Surcharge[7]. These are both ways of encouraging people to take up private health insurance while young and keeping it, especially people on higher incomes.

At the other end of the scale is gold cover, which includes unrestricted cover for all defined clinical categories, including pregnancy and birth.

You can generally change your level of cover at any time. When you upgrade to include new services or increase benefits for existing services, you will need to serve new waiting periods for those new or increased benefits.

A common waiting period is 12 months for pre-existing conditions (any ailment, illness or condition that you had signs or symptoms of during the six months before upgrading, even if undiagnosed), and for pregnancy and birth-related services. But there is generally only a two-month waiting period for psychiatric care, rehabilitation or palliative care, even if it’s for a pre-existing condition.

It’s a good idea to review your policy every two years because your health needs and financial circumstances can change.

How much do companies pay out?

The proportion of premiums that are paid out to cover medical claims is known as the “average payout ratio”. And this has been about 84–86%[8] over most of the past 20 years.

This does not mean your health insurer will pay out 84–86% of your individual claim. This national average accounts for the percentage of all premiums in any one year, across all insurers, that’s paid out in claims.

The payout ratios vary by insurer and are slightly higher for not-for-profit health insurers[9] than for-profit insurers.

That’s because for-profit health insurers have pressure to deliver profits to shareholders and have incentives to minimise payouts and control costs.

If not properly managed, these incentives may result in higher out-of-pocket expenses and denied claims.

Why has my claim been rejected?

Common reasons for claims to be rejected include:

  • the policy excluded or restricted the clinical category

  • the waiting period was not served

  • incorrect information (for example, a doctor billed an incorrect item number)

  • what’s known as “mixed coverage” (as in the Bupa scandal), where not everything in a claim is covered, but the entire claim is declined.

What if I think there’s an error?

If your health insurance company refuses your claim, you can request a detailed explanation in writing.

If you believe your claim has been incorrectly denied, you can make a formal complaint directly with the insurer. For this you need to check your policy documents, and gather supporting evidence. This may include detailed invoices, medical reports, referral letters and correct item numbers.

If you are not satisfied with the outcome of the health fund’s internal review, or the fund doesn’t respond with the specific time-frame (for instance, 30–45 days), you can escalate your complaint.

You can get in touch with the Commonwealth Ombudsman[10] (phone: 1300 362 072). This provides a free, independent complaint handling service for a range of consumer issues, including health insurance.

Bupa customers concerned about a “mixed coverage” claim can contact the company directly[11].

What can governments do?

The Bupa scandal, along with ongoing concerns about transparency and rising out-of-pocket costs, highlights the need for policy reforms to better protect consumers.

The government should require health insurers and health-care providers to give clear estimates of all potential out-of-pocket costs for a procedure before it happens. This would avoid unexpected bills and help consumers make informed decisions about their health care.

The government could also let the ACCC or the Australian Prudential Regulation Authority[12] conduct regular, independent audits of insurers’ claims systems and practices.

References

  1. ^ has fined Bupa A$35 million (www.accc.gov.au)
  2. ^ started to recompensate members (www.accc.gov.au)
  3. ^ 45.3% of Australians (www.apra.gov.au)
  4. ^ basic, bronze, silver and gold (www.health.gov.au)
  5. ^ clinical categories (www.health.gov.au)
  6. ^ Lifetime Health Cover loading (www.ato.gov.au)
  7. ^ Medicare Levy Surcharge (www.ato.gov.au)
  8. ^ 84–86% (privatehealthcareaustralia.org.au)
  9. ^ slightly higher for not-for-profit health insurers (www.ama.com.au)
  10. ^ Commonwealth Ombudsman (www.ombudsman.gov.au)
  11. ^ contact the company directly (www.bupa.com.au)
  12. ^ Australian Prudential Regulation Authority (www.apra.gov.au)

Read more https://theconversation.com/will-my-private-health-insurance-cover-my-surgery-what-if-my-claim-is-rejected-260702

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Tricia Paoluccio designer to the stars

The Case for Nuturing Creativity in the Classroom, and in our Lives I am an actress and an artist who has had the privilege of sharing my work across many countries, touring my ...

Duke of Dural to Get Rooftop Bar as New Owners Invest in Venue Upgrade

The Duke of Dural, in Sydney’s north-west, is set for a major uplift under new ownership, following its acquisition by hospitality group Good Beer Company this week. Led by resp...

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...