You have private health insurance, you need mental health support, and naturally, you want to know: will your insurance cover it?
The answer is not always as simple as yes or no.
Private health insurance can help with certain mental health services, but what you can claim depends on your policy, whether you have hospital or extras cover, the type of treatment you receive, waiting periods, benefit limits, and your provider’s fees.
You may also be able to access Medicare-supported mental health care, meaning private health insurance is not necessarily your only option.
So, what is private health insurance actually useful for when it comes to mental health? And does private health insurance cover therapy?
Let’s break it down.
What Is Private Health Insurance?
Private health insurance is optional insurance that can help pay for certain healthcare costs.
In Australia, private health insurance generally falls into two broad categories:
- Hospital cover, which can help with eligible treatment when you are admitted to hospital as a private patient.
- Extras cover, which can contribute towards selected services outside hospital, depending on your policy.
Not every policy covers the same services. Some extras policies, for example, include psychology benefits, while others may have different limits or exclusions.
This is why having private health insurance does not automatically mean that every psychologist, psychiatrist or therapy appointment will be paid for by your insurer.
How Does Private Health Insurance Work?
You pay a premium to your health insurer in exchange for the level of cover outlined in your policy.
When you receive an eligible service, your insurer may pay a benefit towards the cost. However, you may still have to pay some or all of the remaining amount yourself.
What you can claim depends on factors such as:
- The type of policy you have
- Whether you have hospital or extras cover
- Whether the particular service is included
- Waiting periods
- Annual or service limits
- Whether your provider meets your insurer’s requirements
- The fee charged by the healthcare professional
- Whether Medicare also applies to the service.
For mental health care, this distinction is particularly important because hospital treatment and out-of-hospital appointments are treated differently.
Private health insurers generally cannot cover most Medicare-covered services delivered outside a hospital. However, extra policy options can cover certain non-Medicare services, such as psychology, if the policy includes them.
What Does Private Health Insurance Cover for Mental Health?
Private health insurance can cover mental health treatment in different ways, depending on your policy.
Hospital mental health treatment
Hospital cover can include eligible psychiatric treatment provided in hospital. The level of cover matters, and some policies may provide restricted rather than unrestricted benefits.
There can also be waiting periods. Under Australian private health insurance rules, insurers can generally apply a two-month waiting period for psychiatric care, including when the condition was pre-existing.
Some policies also allow eligible members to upgrade their psychiatric hospital cover after completing the required waiting period without serving another waiting period for the higher level of psychiatric benefits. This exemption can generally be used once in a lifetime.
Psychology through extras cover
Some extras policies include psychology or other mental health services.
For example, current policies listed on the Australian Government’s PrivateHealth.gov.au website show that psychology benefits can have specific annual limits, waiting periods and benefit amounts. Some policies also group psychology with other services under a combined limit.
This means two people can both have private health insurance but receive very different psychological benefits.
If you’re considering psychological support but aren’t sure what type of professional you need, read our guide to Psychologist vs Psychiatrist: What’s the Difference?
Does Private Health Insurance Cover Therapy?
Sometimes private health insurance covers therapy, but not automatically.
Whether private health insurance covers therapy depends on what your policy defines as an eligible service.
For example, an extras policy may offer a psychology benefit. Some policies may also include counselling or other recognised mental health services. Current Private Health policy statements indicate that insurers can include psychology, counselling, and other mental health services under extras cover, but the limits and eligibility requirements vary across policies.
Before booking an appointment, check:
- Does my policy include psychology or counselling?
- Is there a waiting period?
- What is my annual benefit limit?
- How much does my insurer pay per appointment?
- Is my practitioner eligible for the benefit?
- Will I have to pay a gap?
- Have I already used some of my annual limit?
The word “covered” can therefore be misleading. Your insurer may contribute towards the appointment without paying the entire fee.
What Is a Gap Payment?
A gap payment is the amount you have to pay yourself when the benefit you receive from Medicare and/or your private health insurer does not cover the full cost of treatment.
For example, if an eligible service costs more than the benefit available under your policy, you may need to pay the difference.
The gap payment can vary depending on the type of treatment. For example, in hospital, Medicare generally pays 75% of the applicable Medicare Benefits Schedule (MBS) fee. Private health insurance may cover the remaining 25% if your policy provides benefits. However, if the doctor charges more than the MBS fee, you may have to pay the difference yourself.
You may also incur other out-of-pocket costs, such as a hospital excess or a co-payment.
The safest approach is to ask your insurer and healthcare provider about the expected cost before treatment, rather than assuming that “covered” means “no cost”. PrivateHealth.gov.au specifically recommends checking with your insurer, hospital and doctors about potential out-of-pocket expenses in advance.
What Is a Mental Health Care Plan?
You may have heard of a Mental Health Care Plan, particularly if you’ve spoken to your GP about accessing psychological support.
The current Medicare term is “Mental Health Treatment Plan.”
A Mental Health Treatment Plan can be prepared by an eligible GP or a prescribed medical practitioner following an assessment of your mental health needs. Under the Better Access initiative, eligible patients can access Medicare benefits for up to 10 individual and 10 group allied mental health services per calendar year.
This is separate from private health insurance.
A Mental Health Treatment Plan does not mean your private insurer is paying for your psychology appointments. Instead, it provides a pathway to Medicare benefits for eligible mental health services.
Can You Use Medicare and Private Health Insurance for Mental Health Care?
Potentially, yes: but they don’t simply pay for the same service twice.
In 2024–25, around 2.8 million Australians received Medicare mental health services, with 13 million services provided nationally. Around 96% of these services were delivered outside hospitals, underscoring the importance of Medicare-supported community and outpatient mental health care alongside private health insurance.
Both Medicare and private health insurance operate under different rules.
For example, you may have extras cover that provides a psychology benefit while also being eligible for Medicare rebates for certain mental health services. The relevant claiming rules and the type of service will determine which benefits apply.
Private health insurance can also become particularly relevant when mental health treatment involves hospital care.
The important thing is to check which scheme applies to the particular service you’re receiving, rather than assuming that having both forms of cover means your entire treatment will be paid for.
Private Health Insurance vs Mental Health Treatment Plan
The easiest way to understand the difference is to think about where the funding comes from and what the cover is designed to do.
Medicare / Mental Health Treatment Plan | Private Health Insurance | |
Main purpose | Provides Medicare benefits for eligible mental health services | Provides benefits according to your insurance policy |
Psychology | Medicare benefits may apply if eligibility requirements are met | Extras may provide a psychology benefit |
Psychiatric hospital treatment | Medicare contributes to eligible hospital treatment | Hospital cover may contribute to eligible private treatment |
Waiting periods | Not the same as private insurance waiting periods | Waiting periods can apply |
Annual limits | Medicare rules apply | Extras policies may have annual or service limits |
Out-of-pocket costs | May still apply | May still apply |
So, having private health insurance doesn’t mean you should ignore Medicare options, and having access to Medicare doesn’t make private health insurance irrelevant.
The right pathway depends on your circumstances and the type of care you need.
What Should You Check Before Claiming Mental Health Treatment?
Before making an appointment, spend a few minutes checking your cover details.
1. Check whether mental health services are included
Look at your policy for terms such as psychology, counselling, psychiatric treatment or mental health services.
2. Check whether you have hospital or extras cover
These provide different types of benefits. Hospital cover does not automatically give you extras benefits for regular psychology appointments.
3. Check waiting periods
Waiting periods can apply when you take out private health insurance or increase your level of cover. For hospital psychiatric care, the maximum waiting period is generally two months. Extras waiting periods vary by policy.
4. Check your benefit limit
Your policy might pay a certain amount per appointment or have an annual limit. Once you’ve reached that limit, you may have to pay the full fee yourself.
5. Ask about your likely gap
Don’t just ask, “Is psychology covered?”
Instead, ask:
“How much will my insurer contribute towards this appointment, and what will I have to pay?”
That question gives you a much clearer idea of your actual cost.
6. Confirm the practitioner is eligible
Your insurer may have requirements about the type of practitioner who can provide a claimable service.
7. Check before your first appointment
Policies can change, and benefits differ between insurers and products. Confirming your current cover directly with your insurer is the most reliable way to know what you can claim.
What If Private Health Insurance Doesn't Cover Your Therapy?
Not having psychology included in your private health insurance doesn’t mean you have no options.
Depending on your circumstances, you may be able to access Medicare-supported mental health care through the Better Access initiative, including services accessed through a Mental Health Treatment Plan.
You can also discuss your mental health needs with your GP, psychologist or psychiatrist to determine what type of support may be appropriate.
If you’re already seeing a mental health professional, ask them about their fees and whether Medicare rebates or private health insurance benefits may apply to your particular appointment.
Getting Mental Health Support With Elyséa HEALTH
Understanding your insurance shouldn’t be the hardest part of getting mental health support.
At Elyséa HEALTH, we personalise mental health care to your needs, whether you’re seeking psychological support, psychiatric assessment, or another form of professional care.
Before booking, confirm the consultation fee, whether Medicare rebates apply, and whether your private health insurance provides any relevant benefits. This gives you a clearer picture of what your treatment may cost before you begin.
Explore our Psychology Services to learn more about the support available through Elyséa HEALTH.
The Bottom Line
Private health insurance can contribute towards mental health care, but having private health insurance doesn’t automatically make therapy or psychiatric care free.
Your insurance cover may provide benefits for eligible psychiatric hospital treatment, while extras cover may contribute towards services such as psychology or counselling. However, waiting periods, annual limits, provider requirements, excesses and gap payments can all affect what you ultimately pay.
A Mental Health Treatment Plan is a separate Medicare pathway that may allow eligible people to access Medicare benefits for certain mental health services.
The best way to avoid unexpected costs is to check your policy before treatment and ask both your insurer and healthcare provider what you are likely to pay.
FAQs
1. Does private health insurance cover mental health treatment?
Private health insurance can cover some mental health treatment, depending on your policy. Hospital cover may include eligible psychiatric treatment in hospital, while extras cover may provide benefits for services such as psychology. Waiting periods, benefit limits and eligibility requirements can apply.
2. Does private health insurance cover psychology?
Some extras policies include psychology benefits, but not all do. Your policy may also have waiting periods, annual limits, per-appointment benefits or other conditions. Check your policy and confirm the benefit with your insurer before booking.
3. Does private health insurance cover therapy?
It can, but it depends on what your policy defines as an eligible service. Some extras policies cover psychology or counselling, while others may not. You may still have an out-of-pocket cost even when therapy is covered.
4. Does private health insurance cover a psychiatrist?
Private health insurance may contribute to eligible psychiatric treatment provided in hospital if your hospital policy includes the relevant level of cover. An out-of-hospital psychiatrist appointment generally cannot be covered by private health insurance in the same way as hospital treatment because private insurers generally cannot cover most Medicare-covered services delivered outside hospital.
5. Does private health insurance cover mental health hospitalisation?
Hospital cover can include eligible psychiatric treatment, depending on your policy. Restricted benefits, waiting periods, excesses and co-payments may affect what you actually receive from your insurer.
6. How long is the waiting period for psychiatric treatment?
The maximum waiting period for psychiatric care under hospital cover is generally two months, including for pre-existing conditions. A specific exemption may also allow eligible members to upgrade their psychiatric hospital benefits without serving another waiting period, subject to the relevant rules.
7. Can I use Medicare and private health insurance for mental health treatment?
Potentially, yes, but Medicare and private health insurance operate under different rules. Which benefits apply depends on the type of service, how it is delivered, and the eligibility requirements. You should not assume that both schemes will pay benefits for the same service.
8. Can I get psychology through Medicare without private health insurance?
Yes. Eligible Australians can access Medicare benefits for certain mental health treatment services through the Better Access initiative. Eligible patients can claim Medicare benefits for up to 10 individual and 10 group therapy mental health treatment services per calendar year.
9. Do I need a Mental Health Treatment Plan to see a psychologist?
A Mental Health Treatment Plan is one pathway to accessing Medicare benefits for eligible mental health services. However, you can also see a psychologist privately without a Mental Health Treatment Plan; in that case, Medicare rebates or private health insurance benefits may or may not apply, depending on your circumstances.
10. Does private health insurance cover counselling?
Some extras policies may provide counselling benefits, but coverage varies by insurer and policy. Check whether counselling is specifically listed as an eligible service, rather than assuming that all therapy or mental health appointments are covered.
11. How much does private health insurance pay for psychology?
There is no single amount. The benefit depends on your insurer, policy, annual limit, waiting period, and the particular psychology service. Your insurer can tell you the applicable benefit, while your psychologist can confirm their consultation fee and any expected gap.
12. What happens if my private health insurance doesn’t cover therapy?
You may still have other options. Depending on your circumstances, you may be eligible for Medicare-supported mental health services through Better Access. You can speak with your GP or mental health professional about suitable treatment options and potential Medicare rebates.
Elyséa HEALTH Website & Content Disclaimer
Information published on the Elyséa HEALTH website, including articles, blogs, and educational resources, is provided solely for general health information and wellbeing education. It does not constitute medical or psychiatric advice and is not a substitute for personalised assessment, diagnosis, or treatment by a qualified Australian healthcare professional. Accessing this website does not establish a clinician-patient relationship with this website or any of its practitioners.
The content on the website is for general information and may be prepared or reviewed by clinicians or the Elyséa HEALTH team. It is not a substitute for personalized medical advice. While we try to keep the information accurate and up to date, we cannot guarantee it is complete or suitable for your individual situation.
Always consult your own healthcare provider before making decisions about your health. We adhere to Australian healthcare advertising expectations, including principles consistent with AHPRA guidance. No outcomes, results, or treatment benefits are guaranteed.
Remember, this website is not for any emergency or crisis service. If you are in immediate danger, call 000.
Mental health crisis and support services in Australia include:
SA Mental Health Triage Service (24/7): 13 14 65
Lifeline: 13 11 14
Beyond Blue: 1300 224 636
Suicide Call Back Service: 1300 659 467
MensLine Australia: 1300 789 978
Kids Helpline: 1800 55 1800
Open Arms Veterans & Families Counselling: 1800 011 046
13YARN (First Nations support): 13 92 76
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