Ever wondered what would happen if you, a student, or a volunteer were injured and needed to claim under a personal accident policy? Bellrock has managed numerous personal accident claims, particularly for schools and not-for-profit organisations.
Typically, in a personal accident claim, the insurer will only reimburse the out-of-pocket expenses not covered by Medicare or your health fund. Certain out-of-pocket expenses, such as the costs of treatment associated with an injury, may not be covered due to a concept known as the “Medicare gap.” These out-of-pocket expenses could also increase if there is no available cover from your private health fund provider.
There are some limited circumstances whereby certain treatment costs, not covered by Medicare, are covered by insurers but this is an exception, rather than the rule.
The “Medicare gap” Explained
Medicare is an Australian Government scheme that provides eligible Australian residents with subsidised healthcare. Medicare is governed by the Medicare Benefits Schedule (MBS) which lists all treatments and the associated rebate any eligible Australian resident is entitled to post treatment. For example, the MBS states that for a short physician consultation the MBS rebate amount is $42.85. Thus, any amount charged by the physician for the consultation which falls above the MBS rebate amount is the Medicare gap amount.
For example: If a physician charged $100 for a short consult, and the rebate amount was $42.85, then the Medicare gap amount would be $57.15.
By law, insurers cannot pay for the Medicare gap because such payments likely contravene the Health Insurance Act 1973 (Cth), the Private Health Insurance Act 2007 (Cth), or the National Health Act 1953 (Cth). This legal prohibition from insuring the Medicare gap is intended to prevent inflation in healthcare costs although it can be debated whether the prohibition is effective.
The Medicare gap does not apply to non-MBS medical expenses or where the insured party is not eligible for Medicare, i.e. an overseas visitor.
Under most personal accident policies Non-Medicare/MBS medical expenses means:
“expenses that are not subject to any full or partial Medicare rebate nor recoverable by you or by an insured person from any other source and incurred within twenty four (24) calendar months of an insured person sustaining injury and paid by you or an insured person on behalf of an insured person for treatment certified necessary by a legally qualified medical practitioner to a registered private hospital, physiotherapist, nurse or similar provider of medical services including the cost of medical supplies or ambulance hire but excluding the cost of dental treatment unless it is necessarily incurred to sound and natural teeth, other than first teeth or dentures, and is caused by injury.”
It is important to understand the potential costs associated with the Medicare gap which may arise in the event of an injury. There are different types of personal accident policies with varying levels of cover which should be considered based on your circumstances. In selecting appropriate coverage, it is always beneficial to discuss the options available to you or your organisation with your risk advisor to ensure coverage is fit for purpose. For any questions about your insurance options, your Bellrock Advisor is here to help.
