What is excess in health insurance?

Q: Do you have to pay hospital excess for day surgery?

Whether the surgery is same-day or overnight, if your Medibank hospital cover has an excess then this will generally need to be paid for your hospital stay upon admission. You can check your cover summary for your level of hospital excess.

When it comes to private health insurance, a term commonly used is "hospital excess." It's an important factor that impacts both your premiums and the out-of-pocket costs you may need to pay if you’re admitted into hospital.

To help you select the right cover for you, we’ll guide you through understanding what a hospital excess is, how it works and what levels you can choose.

What is hospital excess?

Excess on your hospital cover is a fixed amount that you agree to pay towards your hospital treatment when you’re admitted as a private patient before your health insurer pays any benefits. Choosing a policy with a higher excess, generally helps to reduce your premium.

However, there are instances where the excess won’t apply. With Medibank, there’s no hospital excess for kids on all of our family covers.^#

How does hospital excess work?

Hospital excess comes into effect when you're admitted to hospital as a private patient. It's important to note that each insurer has its specific rules, but typically at Medibank, you'll only need to pay the excess once per member per calendar year, regardless of how many times you are hospitalised. When your excess payment is due, either the hospital or your health fund will inform you of the amount you owe.

For example:

Lily’s hospital treatment for her wisdom teeth surgery cost around $2,000. Her hospital cover excess is $500 which means she’ll need to pay this up front before Medibank pays benefits.

Do you have to pay hospital excess for day surgery?

How does excess affect your premium?

Hospital excess is one of the factors that influence your hospital cover premium. The relationship is simple: The higher your excess, the lower your premium. However, this means you’ll need to pay more upfront costs when admitted into hospital as a private patient.

If you choose a lower excess on your policy instead, it’s likely you’ll have a higher premium but reduced out-of-pocket expenses for hospital treatments.

Medibank has a number of excess options ranging from $0, $500 to $750 on various hospital covers to help you select an option best suited to you.

How to choose an excess

Choosing the right level of hospital excess depends on several factors, including your health needs, financial situation, and claims history. Here's some information to help you decide:

When should I consider paying a higher excess?

When should I consider paying a lower excess?

Selecting a lower excess might be considered in the following circumstances:

- If you have a history of health concerns or a condition that requires hospital admission.
- If you're expecting to be hospitalised for a planned procedure.
- Although your premium may be higher with lower or no excess, it could be more manageable over time than paying a higher excess when being admitted.

Selecting a cover and level of excess that works for your health needs and financial situation is important. Compare our range of hospital cover options or get in touch with us so you can find the cover that’s right for you.

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Things you need to know

^# Other out–of–pocket expenses may apply.

While we hope you find this information helpful, please note that it is general in nature. It is not health advice and is not tailored to meet your individual health needs. You should always consult a trusted health professional before making decisions about your health care. While we have prepared the information carefully, we can’t guarantee that it is accurate, complete or up-to-date. And while we may mention goods or services provided by others, we aren’t specifically endorsing them and can’t accept responsibility for them. For these reasons we are unable to accept responsibility for any loss that may be sustained from acting on this information (subject to applicable consumer guarantees).