A health insurance limit represents the maximum amount your insurer will contribute towards covering the cost of services and items included in your cover within a specific timeframe. Each private health insurer will establish their own type of limits, but there are a few you’re likely to come across:
- Standard limits: These will differ based on your type of cover. Some are consistent across all funds and cover types, while others aren’t. For specific details on your limits, read your PDS.
- Annual limit: This is the maximum amount your insurer will contribute for your covered services and items within a financial year (e.g. July 1 to June 30). Annual limits are generally subject to per-person restrictions.
- Family limit: This is the total claimable amount by all members covered under your policy within a financial year. Each person covered under the policy can claim up to their allocated ‘per-person’ limit unless the family limit has already been exhausted by other members.
- Per-person limit: Every person under the policy can claim up to their per-person limit within a financial year, except if the family limit has been reached by other members or if the person has exceeded a lifetime limit.
Some health funds have additional limits, such as flexible limits so you can have higher maximums for something like physio services and less on dental, for example. Or they may have bundle limits or even loyalty limits, where you can claim more on certain services if you stick with the same insurer for a long time. Make sure to read your PDS to get across all the specifics here.
Be aware that not all health insurance limits roll over each year. While rolling limits do, there are some services that will only be covered under lifetime limits – so once you hit the maximum, that’s it! And it’s usually carried across all Australian health insurers.
A sub-limit is the highest claimable amount for a particular service, subtracted from the wider annual limit. Let’s look at an example:
Your policy may include a total annual limit of $800 for orthodontic treatments, with a sub-limit of $400 for each service (e.g. root canals, extractions and more). This means you can only claim a maximum of $400 for any of these services within the year.
If you claim $400 for a root canal, for example, you won’t be able to claim further for that same service throughout the year. However, the remaining $400 could be used for one or more of the other services within the ‘orthodontic treatments’ umbrella.
A lifetime limit – or cap – is the maximum benefit you can claim for a specific service in your lifetime, and it tends to carry across to all insurance providers. The good news is that lifetime caps are only for very specific procedures, such as laser eye surgery, and you may not even end up using them at all!
Here’s how it works. Once the threshold is reached (which will be outlined in your PDS), you won’t get any further cover for that service – even if you raise your level or cover or switch to a different provider. Remember that these lifetime limits are retained across all insurers, so if you exhaust your cap with your current insurer, switching to a different one won’t reset it.
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