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Published on September 7, 2023

How Health Insurance Can Pay for Mental Health Treatments Like Psychiatry & Psychology in Australia

Mental health is an integral aspect of overall well-being that often gets overshadowed by physical health. In Australia, mental health conditions are more common than one might think; approximately 45% of Australians will experience some form of mental health condition in their lifetime. Despite this prevalence, the number of people seeking mental health support is significantly less than those seeking treatment for physical ailments. This article aims to shed light on how private health insurance can be a financial lifesaver when it comes to accessing mental health services like psychiatry and psychology.

For a more comprehensive guide, you can refer to Compare Club’s Guide on health cover mental health extras

The Importance of Early Intervention

Early intervention is crucial in managing mental health conditions effectively. Most conditions can be treated or managed well if they are diagnosed early. Health insurance can facilitate this by covering the costs of early treatments and consultations, thereby encouraging individuals to seek help promptly.

Types of Mental Health Conditions Covered

Private health insurance in Australia generally covers a wide range of mental health conditions, including but not limited to:

  • Depression
  • Anxiety Disorders
  • Eating Disorders
  • Post-Traumatic Stress Disorder (PTSD)
  • Postnatal Depression

Types of Treatments Available

Hospital Cover vs. Extras Cover

When it comes to mental health treatments, private health insurance is usually divided into two categories: Hospital Cover and Extras Cover.

Hospital Cover: This type of insurance will cover some or all of your out-of-pocket costs for inpatient care at a public or private hospital. Inpatient psychiatric services fall under this category. For unrestricted access to hospital psychiatric services, a top-tier Gold hospital policy is often required.

Extras Cover: This is for treatments like counselling and therapy that take place outside of a hospital. Extras cover can also include pharmaceutical subsidies for many mental health conditions. You’ll be able to get rebates back from your health fund on your extras.

Specific Treatments

Mental health treatments can vary depending on the symptoms and severity of the condition. Most treatments can include:

  • Medication
  • Regular counselling sessions
  • Cognitive Behavioral Therapy (CBT)
  • Inpatient treatment in a hospital or specialist recovery centre
  • Waiting Periods and Waivers

One of the advantages of private health insurance is the relatively short waiting period for mental health treatments, which is typically two months. If you need urgent treatment, there’s also the mental health waiver, a government requirement introduced in 2018. This waiver allows you to bypass the standard waiting period, making it easier to access immediate care.

Cost and Rebates

Understanding Rebates

The cost of mental health coverage varies from fund to fund. Some funds offer a percentage of the session back as a rebate. For example, if your therapist costs $200 per session and you get 60% back, you’ll have an $80 out-of-pocket expense. Others may offer a set benefit per session, irrespective of the total cost.

Gap Fees and Limits

It’s also important to consider gap fees and the annual limits on your extras. Gap fees are the difference between what your health fund pays and what your healthcare provider charges. Your annual limit is the maximum amount you can claim back on your extras each year.

Medicare and Public Health Services

While private health insurance offers extensive coverage, it’s worth noting that Medicare also provides some level of mental health support. Medicare can cover part or all of the cost of treatment for many mental health conditions, including consultations with GPs and specialists, and even pharmaceutical subsidies.


Mental health is as important as physical health, and choosing the right health insurance can significantly ease the financial burden of mental health treatments. By comparing different policies and understanding what each offers in terms of mental health coverage, you can find a policy that not only fits your budget but also meets your healthcare needs.

For a more in-depth comparison of mental health insurance policies, visit Compare Club.

Note: This article is for informational purposes only and should not be considered as medical or financial advice. Always consult with a healthcare or financial professional for personalized advice.

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