Is medication covered by private health insurance?

Here’s what you need to know about claiming for medicines through private health insurance.

Health Agenda
February 2018

Most of us buy prescription medication from time to time. For many drugs, we often pay only part of the cost because the rest is paid for by the Pharmaceutical Benefits Scheme (PBS). The PBS is a government program that subsidises medicines to make them more affordable.

However, as we’ll explain, not every medication is listed on the PBS. If your doctor prescribes one of these drugs you’ll be faced with paying the full cost of the medication, which could be expensive. This is where private health insurance can help.

To understand how it all works, it’s useful to know how drugs are assessed for the PBS.

Who decides which drugs should go on the PBS?

Before being considered for the PBS, new medication must first be approved by the Therapeutic Goods Administration (TGA), which is part of the Australian Government Department of Health. The TGA is responsible for regulating medicines, vaccines and other health-related products.

“Once the TGA gives a drug the tick of approval and says that it’s safe to use on patients in Australia, the drug then goes through the Pharmaceutical Benefits Advisory Committee (PBAC),” says HCF’s medical director, Dr Andrew Cottrill. “The primary role of the PBAC is to recommend new medicines for listing on the PBS.”

“The PBAC considers the medical and cost effectiveness of different drugs. It looks at the clinical evidence, assesses whether there are similar drugs on the market, measures the drugs against each other and assesses what the clinical benefit of a particular drug may be.”

This process, says Dr Cottrill, can take many months. “It’s a very in-depth undertaking carried out by medical experts,” he explains. “So you can have a drug that has TGA approval but hasn’t yet got funding to appear on the PBS.”

There's more you need to know...

If a drug does make it onto the PBS, it doesn’t means everyone is entitled to the government subsidy for that medication. Eligibility could depend on factors like your age, gender and your medical condition and history.

So if your doctor wants to prescribe a drug that’s on the PBS, but you don’t qualify for the subsidy, you’ll be liable for the full cost. If this happens to you, it’s important to be open with your doctor about your ability to pay for your medication so you can find the best solution together.

Can I claim for medications that are on the PBS?

No. Government regulations prevent private health insurers from paying a benefit towards the cost of drugs that you can receive through the PBS. Because we can’t determine whether individual members are eligible for the PBS subsidy, no drugs that are listed on the PBS qualify for an HCF benefit.

So when could I claim for medication?

If “pharmacy” or “vaccines and immunisations” are included on your extras cover you may be able to claim for some non-PBS listed medicines and vaccines. These could be drugs that are TGA approved but are either still being considered for inclusion on the PBS, or medication that didn’t make the list for various reasons. They do need to be registered with the TGA though.

There are a number of exclusions when it comes to what HCF covers: over-the-counter, reproductive and weight loss medication are a few examples.  

It’s also important to know that if you are able to claim for a drug, after the deduction of a co-payment, the maximum benefit you can receive towards the cost is $50.

How can I find out if HCF covers my non-PBS drug?

You can find the definition of “pharmaceutical item” in our member guide. To check whether your specific medication is covered it’s best to call us on 13 13 34 so we can check it out for you.

Does HCF cover experimental drugs?

A drug is considered to be 'experimental' if it hasn’t yet been determined to be safe or effective. They’re usually tried under strict medical supervision, like in the context of a clinical trial – a scientific study where drugs and medicines are assessed to see if they could be safely introduced as a new treatment for a specific disease or condition.

While people may be willing to try experimental drugs for a particular condition or disease, there may be unforseen adverse events so it's important they're used in a controlled setting such as a clinical trial. Private health insurers don't cover the cost of experimental drugs, treatments or procedures.

“HCF doesn’t cover experimental drugs because it’s the responsibility of the drug company to fund research and provide the evidence to get the drug listed on the PBS” says Dr Cottrill.