Does health insurance cover prescription medication?

Private health insurance can help with the cost of prescription medication that isn't already subsidised by the PBS. Which is nice.

Who is this cover for?

Key takeaways

  • Medication is already pretty cheap in Australia, with the PBS covering the cost of most of the essentials.
  • Not all prescription medications are subsidised by the Government under the PBS, so can get quite expensive.
  • Extras cover can help pay for those medications if you have a policy that covers non-PBS pharmaceuticals.

Can I claim money back on prescription medication?

Yes, mid-level extras cover can help pay for the cost of prescription medications. Extras policies typically only provide cover for prescription drugs that aren't subsidised under the PBS – which otherwise, without insurance, you'd have to pay the full price for.

Most policies let you claim between $200 and $500 per year for prescription medication. Some health funds also impose a sub-limit you can claim on each individual script. This could be a flat figure, for example $30 per script, or a maximum percentage of the cost of the script.

Finder survey: Do Australians in different states worry about being able to pay for medical bills?

ResponseWAVICSAQLDNSW
No48.11%45.93%58.67%46.19%40.58%
Yes37.74%37.04%28%35.03%42.17%
Somewhat14.15%17.04%13.33%18.78%17.25%
Source: Finder survey by Pure Profile of 1006 Australians, December 2023
Data for ACT, NT, TAS not shown due to insufficient sample size. Some other states may also be excluded for this reason.

How does health insurance cover prescription drugs?

Hospital cover

Hospital cover

Inpatient pharmaceuticals are included in hospital cover. Policies can help pay for medications provided to you while you are being treated as an inpatient in hospital.

Medicine

Extras cover

Mid-range extras cover can be used to cover the cost of non-PBS pharmacy items that are prescription-only and prescribed by a medical practitioner like your GP. This can include contraceptives for medical conditions, travel vaccinations, medically necessary hormonal implants and more.

When can I claim money back?

In order to make a prescription medication claim on your extras policy, your doctor will need to prescribe medication that is not subsidised under the PBS. The medication must also:

  • Cost more than $38.30
  • Be a category S4 or S8 items (prescription-only medicines or controlled drugs)
  • Be prescribed by a registered medical practitioner, dentist or nurse and only be available on prescription
  • Be dispensed by a registered pharmacist
  • Be approved by the Therapeutic Goods Administration (TGA) for sale within Australia

Extras that includes pharmaceutical cover doesn't usually have any waiting periods. However, hospital cover generally has a 2-month waiting period, or 12 months for pre-existing conditions.

How do I make a pharmacy claim?

The way you claim for the cost of prescription medication may vary depending on the extras claim options supported by your health fund. These include:

  • On-the-spot claiming. This is done by swiping your health fund membership card.
  • Online claiming. You can lodge a claim via the online members section of your health fund’s website.
  • Mobile claiming. Many health funds offer quick and convenient claims apps.
  • By post. You can download a claims form and return the completed form to your fund.
  • In-person. You can also lodge claims by visiting one of your health fund’s retail centres.

Your claim must be accompanied by an official pharmacy receipt which includes: your name, the script number and the name of the drug prescribed.

When can’t I make a pharmacy claim?

There are some situations where you cannot claim the cost of prescription medication on your private health insurance extras cover, including:

  • If you have received the medications through the PBS or some other Government funding scheme.
  • If the medication has not been approved for use by the Therapeutic Goods Administration (TGA).
  • If the medication can be purchased without a prescription.
  • If the medication is only dispensed via prescription to hospital in-patients (the cost of these drugs can be covered by hospital cover).
  • If the drug is used as a contraceptive.
  • If the drug is listed on your health fund’s exclusions list.
  • If the medication is a compounded or experimental drug.
  • If the medication is a natural remedy of any kind.
  • If you have not served the waiting period imposed by your health fund for prescription medication.

What’s the difference between claiming on private health and on Medicare?

Public system

Medicare

Public health services in Australia are provided by Medicare. Medicare only covers medication listed on the PBS. You'll need your Medicare card to access subsidised medication. The subsidy is usually included when you pay for it at the pharmacy. If your doctor prescribes medication that isn't listed on the PBS, you'll need to pay the full cost yourself.

Surgical Extraction

Private health insurance

Private health insurance is essentially designed to cover the services that Medicare doesn't help out with. This can include medication prescribed by your doctor that isn't listed on the PBS. You might need to make a co-payment towards the total cost of medication. Some providers will allow you to claim your benefit on the spot at the pharmacy; others will reimburse you once you've submitted the claim online.

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  • With 1 click, you can open your results to nearly every fund in Australia.

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FAQs about prescription medicine

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To make sure you get accurate and helpful information, this guide has been edited by Tim Bennett as part of our fact-checking process.
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Editor, Insurance

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

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Gary Ross has written 644 Finder guides across topics including:
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4 Responses

    Default Gravatar
    TrishkaDecember 3, 2018

    Is it then correct that no drug that can be used as a contraceptive is ever covered by health insurance, regardless pf the purpose of the drug, i.e. as a treatment for PCOS?

      AvatarFinder
      JeniDecember 10, 2018Finder

      Hi Trishka,

      Thank you for getting in touch with Finder.

      You can get extras cover for non-PBS items. For example, with ahm – as part of the AM Super Extras policy, pharmacy cover includes cover for hormonal implants, contraceptives for medical reasons, and preventive/travel vaccines.

      You can learn more about health insurance for non-PBS pharmaceuticals. You can also compare quotation from different insurer by entering your details from our extras policies quote engine.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

    Default Gravatar
    DeeMay 8, 2018

    I’m on Saxenda for weight control and it cost about $400 a month. Is there a health insurance cover I can take out which would help with the cost in Australia? Thank you.

      Default Gravatar
      NikkiMay 8, 2018

      Hi Dee,

      Thanks for your message and for visiting Finder.

      The answer to your question is yes. You can take out health insurance for weight management. You can start comparing quotes between insurers by entering your details on our insurance search form and press “Search Policies”.

      As part of their commitment to providing broader health cover, many Australian private health funds can help cover costs for members who participate in a wide range of health and wellbeing programs. From gym memberships and personal training sessions to swimming lessons for kids, these programs are designed to help health fund members achieve improved overall health and wellbeing.

      If you take out extras cover with many Australian private health funds, you’ll be able to access benefits for a large selection of health, wellbeing, diet, and lifestyle programs. These programs are designed to help fund members manage their weight, control chronic diseases, and generally live healthier lifestyles.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

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