How to use health insurance for psychiatric care 

Around 43% of Australians will experience a mental health disorder in their lifetime, and some may need to be hospitalised for treatment. While treatment in public hospitals is free under Medicare, our mental health services are under enormous strain, so you might consider using your health insurance for psychiatric care in a private hospital or psychiatric facility for faster treatment. According to the Australian Institute of Health and Welfare, in 2023-24 around 21% of overnight mental health hospitalisations were in private hospitals, with the average length of stay 19 days.  

Here’s what you need to know about costs and waiting periods when using health insurance for psychiatric care. 

What does health insurance for psychiatric care cover?  

The Hospital Psychiatric Services clinical category of Hospital Cover applies to treatment for psychiatric illnesses, addictions, behaviour disorders and mood disorders, including schizophrenia, bipolar affective disorder, depression and eating disorders. It’s covered on every tier of Hospital Cover, but there are usually restrictions on Basic, Bronze and Silver policies (including at ‘Plus’ level) – which could mean you’ll face large out-of-pocket costs.  

While Hospital Cover normally only applies to inpatient services, some insurers do cover certain outpatient day programs or at-home care programs. Ask your insurer for details.

How much does health insurance for psychiatric care cost? 

All Gold tier policies cover unrestricted psychiatric services. Using the healthslips.com.au calculator, the cheapest Gold tier Hospital Cover policy for one adult in Victoria was $248.55 a month, with a $750 excess, as of April 2026. 

What are the waiting periods on health insurance for psychiatric care? 

Normally Hospital Cover claims have a waiting period of 2 months (or 12 months, for pre-existing conditions), but there’s an exception for some mental health treatments. If you have a Hospital Cover policy where you’ve already served a 2 month waiting period but full psychiatric care benefits are not covered, you can upgrade to a higher tier of cover and claim immediately – but you can only do this once in your lifetime (even if you change insurers). This exemption also applies to hospital treatments within the past 5 days of psychiatric treatment in hospital.   

How do I find the best health insurance for psychiatric care? 

To search every policy from every insurer for free – without commercial bias – head to the healthslips.com.au calculator. It’s fast and you can search anonymously. Make sure the Hospital Psychiatric Treatment clinical category doesn’t have an ‘R’ next to it (which means cover is restricted, and you’ll face out of pocket costs). If you already have Hospital Cover and want to compare it with other policies to find one that better meets your mental health needs, use the healthslips.com.au comparison calculator.  

healthslips.com.au does not provide general or personalised advice. Your particular circumstances are likely to impact the accuracy, completeness and relevance of the information or results. Take this into account before making a decision and talk to an expert for financial advice.  

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

Read more.