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Guide to Prescription Medication Claim under Australia’s Private Health Insurance

  • Writer: Hippo Editor
    Hippo Editor
  • Aug 4
  • 2 min read

Understanding how private health insurance in Australia reimburses prescription medications can help you manage out-of-pocket costs effectively. Below is a comprehensive overview.

1. Two Main Reimbursement Channels

(1) Hospital Cover

Covers medications administered during hospital stays (excludes take-home medicines).

  • PBS-listed medications: Fully covered (direct settlement between hospital and insurer) when used in a contracted private hospital.

  • Non-PBS high-cost medications: Partially reimbursed if approved by the TGA (Therapeutic Goods Administration) for specific treatments.

(2) Extras Cover

Covers prescription medications purchased from pharmacies outside of hospitals, including unopened take-home medicines after discharge.

Requirements:

  • Must be TGA-approved Schedule 4 or Schedule 8 prescription medications.

  • Must not be on the insurer’s exclusion list.

  • Typically covers non-PBS medications or the out-of-pocket portion exceeding the PBS co-payment (since PBS-subsidised drugs are already partly covered by Medicare and cannot be double-claimed).

Note: In both cases, claims are valid only if waiting periods are completed and premiums are up to date.

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2. Required Documents for Claims

When applying for medication reimbursement, you need to submit a pharmacy receipt containing:

  • Medication name, dosage, and quantity.

  • Dispensing date and prescription number.

  • Pharmacist’s details and pharmacy address.

  • A clear note stating “Not PBS subsidised" or "Private"

  • Patient’s personal details.

3. Medications Not Covered

Private health insurance will not reimburse the following:

  • Non-TGA-approved medications.

  • Over-the-counter (OTC) medicines.

  • Compound medications (except under special conditions).

  • Bodybuilding/enhancement drugs (e.g., steroids).

  • Non-essential hospital-supplied medications.

  • Drugs listed on the insurer’s exclusion list.


4. Reimbursement Calculation

  • PBS medications: Only the portion above the PBS co-payment is claimable.

  • Non-PBS medications: Reimbursed according to your policy’s percentage cover.

  • Annual limits: Reimbursement caps depend on your extras cover level.


5. Practical Tips

  • Confirm if your hospital is contracted with your insurer before admission.

  • Seek pre-approval from your insurer before purchasing high-cost medicines.

  • Keep all pharmacy receipts for at least 2 years.

  • Review your policy regularly to track changes in medication reimbursement limits.


Important Note

Reimbursement policies vary across insurers and may change with healthcare reforms. For special or high-cost medications, always confirm the latest rules directly with your insurer. We recommend reviewing your policy every 6 months to stay updated.

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