Private Health Insurance and Plastic Surgery

Hospital Health Cover and Plastic Surgery – Policy Discussion and Terminology

Private Health Insurance and how it covers plastic surgery can be a tricky topic to navigate. This article may help to explain Private Health terminology, fees, level of cover and out of pocket costs.

The common misunderstanding of the term “fully covered” is an unfortunate issue that many patients face when it comes to plastic surgery. Understanding health insurance terminology can help you understand if a procedure will be fully reimbursed by your plan, and what kind of benefits are available through these plans.

Private Health Insurance Terminology

Health insurance terminology can be challenging to navigate and understand. There are many reasons why many patients struggle to understand the terms and policies:

• Health insurance policies can change often, which means that you may find yourself without coverage or with a higher out of pocket cost for plastic surgery.
• Medicare Rebate criteria also change often. The Medicare rebate criteria updates could cause your policy’s exclusion list to grow longer. This might occur once or twice per year (or more).
• When extensive changes to Medicare, health fund policy coverage and exclusion criteria occur:
  • it can not only affect your overall out of pocket surgery costs for plastic surgery, but it can also impact your ability to apply for early release of Super for surgery procedures, based on compassionate grounds.

What type of plastic surgery might be covered by my health insurance policy?

There are often multiple levels of health insurance coverage. The following treatments may be covered by private health policies: 

• Surgeries to correct congenital abnormalities such as repair for cleft palates or nasal deformities causing breathing problems
• Surgery following burns such as skin grafting and release of contractures (tightening)
• Surgery following traumatic injuries including facial bone fractures and breaks
• And if cancerous cells need removal, these procedures may also fall within coverage under most companies’ plans when using plastic surgery referrals.

It’s important to know what your health insurance will cover before you start treatment. There are many treatments that come with restrictions or exclusions, so it’s essential that you check carefully and make sure the policy covers everything for which coverage was purchased!

Gold, Silver, Bronze Coverage for Plastic Surgery?

The cover decision is complicated when your plastic surgery procedure falls across more than one tier level. Coverage typically includes, for example,  medically necessary breast surgery (bronze), skin cancer excision surgery (bronze) and weight loss surgery (gold). It can be hard to know exactly what cover you need. As a guide: 

Bronze cover

This tier generally covers medically necessary procedures like but not limited to:

• Medically necessary breast reduction
• Medically necessary breast lift (mastopexy)
• Medically necessary correction of tuberous breast deformity
• Medically necessary correction of breast asymmetry
• Male Gynaecomastia
• Breast reconstruction after mastectomy with tissue expanders and breast implants
• Latissimus Dorsi flap repair for breast reconstruction

Silver hospital cover

• Medically necessary upper eyelid reduction or blepharoplasty with confirmed visual field impairment
• Otoplasty for prominent ears for patients under 18 years of age
• Scar Revision procedures

Gold hospital cover

The gold tiered cover is for surgery that is designed to reduce a person’s weight, remove excess skin due to weight loss and the reversal of a bariatric procedure.  Examples include:

• Abdominoplasty,
• Arm lift or Brachioplasty and
• Thigh lift
• Gastric banding
• Gastric bypass
• Sleeve gastrectomy

What “Fully Covered” Hospitalisation Really Means

It is common to believe that ‘fully covered’ means that you will have no out of pocket expenses for surgery. This is not true and is one of the reasons why plastic surgery patients find insurance to be so confusing. 

So what does “fully covered” really mean?

Private Health Insurance Funds are very strict about what they cover. 

• Your surgery will only be partially covered by your insurance if it attracts an MBS item number and your condition meets the exact criteria outlined.

• There are incidental expenses involved with having surgery – these may include post-surgery garments, antibiotics and other medicines.
• “Fully Covered” means that Medicare and the Health Fund will cover you to the recommended Government Fee on a particular surgery.
• Unfortunately, this fee often falls far short of what private clinics charge.

For example:  On a $10,000 surgery, you may be rebated $2,000. Therefore, leaving $8,000 out of pocket (for you to pay yourself).

In addition, some Private Health rebates are as little as $300. And, while this may cover out of pocket expenses if you go through the Public system – the wait is often long, sometimes 5-10 years. Furthermore, surgeons in the public system may not be specialist plastic surgeons. 

When your Private Health Insurance says you have “Full coverage” –  you will often STILL have some out-of-pocket costs for plastic surgery.

Plastic Surgery Fees

Your fees include a lot more than just the cost of your Surgeon. These additional surgery expenses can include, but are not limited to;

• the anaesthetist
• surgery assistant
• hospital theatre
• overnight stay (bed fee)
• medications
• pathology
• And, imaging services.

It’s always a good idea to communicate directly with your Private Health Fund. You should ask them the maximum benefit amount you might be able to claim and for which services exactly, for example, surgeon fees, anaesthetist, medications etc. The amount of coverage is determined by your individual fund and your level of coverage. You can get a better idea of what fees might be covered by your private health fund on the Private Health Government Website.

Exclusions, Restrictions and Limitations of Private Health Coverage

The health insurance policy that you buy may have limitations on how much it will cover for medical treatment. These limitations may include coverage for corrective plastic surgery procedures.

Typically insurance policy limitations include:

• Exclusions. They are services that you have to pay for. They are not covered.
• Restrictions. Services that have some coverage for (limited coverage). In other words, you will have more expenses.
  • Restricted benefits are not sufficient to cover the full hospital cost of private hospital admission. You will need to pay the difference. This is also known as a co-payment.
• Benefit limitation periods – Benefits can be reduced for a set amount of time. After this, benefits are paid at the full rate.
• Items that Medicare doesn’t cover. Medicare pays for anything that keeps you healthy, but not things that are optional – such as elective cosmetic surgery.
• Single vs shared rooms – some hospital policies cover the full cost of a shared room, but not a single room. Depending on your policy, this limitation can apply in a private hospital, or a public hospital, or both.

Private Health Insurance Policy Exclusions: Cosmetic Plastic Surgery

Many private health insurance companies do not offer hospitalisation or procedure coverage. This means that they can charge high premiums even though they may not pay for anything. 

For example, cosmetic surgery and most plastic surgery are not covered by general Private Health Funds. Nor are they eligible for Medicare rebates (a limited number of surgeries may qualify – click here for MBS criteria).

Although research has shown that certain surgeries can be helpful for treating urinary incontinence, back pain and neck pain, it seems like private health funds will do their best to avoid paying for this surgery.

Essentially, Private Health will not cover surgery to change your appearance unless the surgery is medically necessary. For example, if a treatment will change the appearance of your nose, and it is necessary for you to have the treatment done to improve your breathing, then your insurance may cover some of it.

Key Learnings About Plastic Surgery and Private Health Coverage

In 2019, Australian PHI (private health insurance) plans changed to tiered coverage. These are gold, bronze, silver and basic. This may have impacted the surgery coverage that you had. 

Our advice?

Always read your policy materials carefully before you choose a private health fund. When you call your insurer about this change, get the representative’s name and ask for everything in writing or by email. Consider recording the conversation with permission from the other party if possible so there is a record of what was said.

RESOURCES, REFERENCES AND FURTHER READING

Helpful Resources for Understanding Private Health Insurance Funds in Australia

• Medibank Health Insurance – Hospitals Extras Explained

Health Insurance Companies

• Australian Unity Health
• GMHBA
• HCF
• NIB
• AHM
• Budget Direct
• myOwn

Health Insurance Helpful Links

• ACCC information about Health Insurance
• What is Covered? Private Health Government Website
• What is Plastic and Reconstructive Surgery? – Ombudsman
• Medicare Benefits Schedule