THE JARGON

•	GAP. This is the difference between what your doctor charges and what Medicare and your health fund will pay for a particular service. Some doctors have an arrangement with a health fund and don’t charge a gap fee, but whether or not you have to pay some of the costs will also depend on your level of cover.
•	LHC (Lifetime Health Cover). LHC applies to everyone born after 1 July 1934 and it sets your premium rating for life when you first take out private health insurance hospital cover. If you do not have hospital cover on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30. For example, if you take out hospital cover at age 40 you will pay 20% more than someone who first took out hospital cover at age 30. The maximum loading is 70%. Once you have paid a LHC loading on your private hospital insurance for 10 continuous years, the loading is removed as long as you retain your hospital cover.
•	IFC (informed financial consent). Before you agree to medical treatment or a surgical procedure, your doctor should discuss all charges you may have to pay out of your own pocket. This is called informed financial consent.
•	MLS (Medicare Levy Surcharge). The Medicare Levy Surcharge is a Levy, or an extra tax, on Australian taxpayers who do not have private hospital cover and who earn above $77,000 for individuals and $154,000 for families, increasing by $1,500 for each additional child after the first. The surcharge is calculated at the rate of 1% of taxable income. It is in addition to the Medicare Levy of 1.5%, which is paid by most Australian taxpayers. The Medicare Levy Surcharge is imposed on individuals and couples or families earning over the threshold who do not have an appropriate level of hospital insurance.
•	30% REBATE. This is the amount paid by the Federal Government toward the cost of your private health insurance. For every $1 you pay in premiums you are entitled to 30 cents back. You can take this as a reduction in premiums, a direct payment from Medicare upon presentation of a receipt from your fund, or a tax deduction at the end of each financial year.
•	EXCESS. This is the amount you agree to pay for hospital services in exchange for lower premiums. In some cases you will contribute each time you go to hospital and in other cases you only have to pay a set amount each calendar year. For example, if you agreed to a $250 excess you will pay the first $250 of your hospital costs if you’re admitted as a private patient. Some policies only charge the excess if you’re admitted to hospital rather than having day surgery.
•	WAITING PERIODS. Health funds have set waiting periods before you are entitled to certain benefits. These waiting periods will be clearly stated in your policy and will only apply to some services. If you are thinking of starting a family and you would like to use one of the deluxe birthing suites in a private hospital, it pays to adjust your health insurance well in advance because there is a 12 month waiting period for obstetrics. If you are going to hospital at any other time it is always best to call your health fund to check your eligibility.
•	GENERAL TREATMENT COVER. These are the ‘extras’ offered in your health policy. Coverage may depend on your type of policy and your fund but they generally include a variety of services such as physiotherapy, dental, optical, podiatry and some alternative therapies.
•	CO-PAYMENT. This is where you agree to pay a part of each hospital service you use. If your policy has a $50 co-payment clause, for example, you will pay $50 each day towards hospital accommodation. In this case a week in hospital would cost you $350.
•	EXCLUSIONARY COVER. If you think there are services covered by private health insurance that you do not think you will need, some funds will take them off your policy for you in exchange for a premium discount. The danger in doing this is that it is difficult to predict your future health needs with 100% certainty and it is always better to have more insurance than not enough.