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If you’re admitted to hospital as a private patient, your insurer won’t pay the entire bill for your treatment. As well as the Gap, which is determined by your doctor and your insurer, you’ll also need to pay an excess and possibly also a co-payment, determined by your policy. So what’s the difference between these charges?
What’s the difference between an excess and a co-payment?
The excess and co-payment are both amounts you’ll need to pay the hospital towards the costs of your treatment when claiming on Hospital Cover. But here’s the difference:
Excess – this is the lump-sum amount you pay for your treatment, determined by your policy. Most policies have an excess of $250, $500 or $750 per person, capped per year. Excesses usually don’t apply for children on Single Parent and Family policies.
Co-payment (sometimes called a ‘daily charge’, ‘overnight excess’ or a ‘daily excess’) – this is the amount you pay to the hospital each day that you’re receiving treatment, up to a set limit per person, per year. Not all policies include co-payments.
Generally, the higher the excess and co-payment, the lower your premiums. The trade-off for lower premiums is that you’ll have to pay more if you’re hospitalised. So if you’re young and healthy, and think you’re unlikely to be hospitalised, you might decide it’s worthwhile to opt for a higher excess and co-payment on your Hospital Cover policy.
Essential to know
Excess and co-payments only apply to Hospital Cover policies, not Extras or Ambulance Only Cover policies.
Rita, paying excess and co-payments
Rita has been admitted to a private hospital for a gallbladder removal. Her policy has a $500 excess and a $200 co-payment per day, capped at $1,000 per year. She pays the $500 excess directly to the hospital when she’s admitted. There’s an annual cap of $500 so she won’t have to pay this again if she goes to hospital again that year. Rita is discharged after 3 days, so she pays $600 in co-payments to the hospital ($200 x 3 days).
How do I find a policy with a higher excess and co-payment?
First, use the healthslips.com.au calculator to search for Hospital Cover policies that meet your healthcare needs and budget. It’s a fast, free way to search every policy from every insurer in Australia in minutes, with unbiased comparisons. In your results, you can adjust the excess and see how it affects your premium. When you click ‘compare’, scroll down to the ‘co-payment’ section of your results and see if any policies offer that option, and how much it is.
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.
