Health insurance reforms 2019

Way back in 2017, the Australian government announced a range of changes focused on stemming the rising costs of private health care in Australia.

Some of these changes have already come into effect, such as increased access for those in need of mental health services and new powers for the ombudsman. However, the bulk of the major changes come into play from 2019 onwards. These include:

  • The removal of coverage for some natural therapies
  • Improved access to mental health services
  • Discounted premiums for people aged between 18 and 29
  • Simplified hospital product tiers

5 things you need to know about the Health Insurance Reforms

What's changing?

As mentioned above, there are a range of changes coming to the private health insurance sector in Australia. Below, you can find out more about the changes and how they'll affect both the treatment you'll receive and your hip pocket.

Health insurance tiers
To help make comparison simpler, hospital policies will be split into four distinct categories: Gold, Silver, Bronze and Basic.
Termination of policies

Termination of old policies

With the changes to the products tiers, some policies will be scrapped. The government has created guidelines on how funds should communicate these changes.
Gold hospital
Gold hospital policies are the top level of cover under the reforms and must cover treatments in all 38 clinical categories.
Silver hospital
Silver hospital cover is a step down from Gold and provides cover for 26 out of the 38 clinical categories, with 3 more categories provided on a restricted basis.
Bronze hospital
Bronze hospital cover is the third tier and provides cover for 18 out of the 38 clinical categories, with 3 more categories provided on a restricted basis.
Basic hospital
Basic hospital cover is the entry-level tier and is only required to offer benefits for rehabilitation, hospital psychiatric services and palliative care on a restricted basis.
Low cost
With the transition to the four-tiered system, the government wants to ensure that basic policies meet minimum standards.
Restrictions removal
To stem rising premiums, the government has approved health funds to restrict coverage for certain clinical categories.
Clinical categories
To make it easier for consumers to understand, the Australian government will introduce standard clinical categories for all medical terms.
Discount for under-30s
To entice more young people to get cover, the government is allowing insurers to offer discounts of up to 10% for those under 30 years of age.
Maximum excess
The maximum hospital excess will jump from $500 to $750 for singles and $1,000 to $1,500 for couples/families. Higher excesses mean lower monthly premiums.
Natural therapies
From April 2019, you will no longer be able to claim 16 natural therapies including yoga, Pilates and naturopathy as part of your extras benefits.
Improved information
The old Standard Information Statement (SIS) sheets are being replaced by a new one-page factsheet called a Private Health Information Statement (PHIS).
Out of pocket costs
The addition of the PHIS along with other measures are designed to make out-of-pocket medical costs easier to understand and more transparent.
On 1 February 2018, prices insurers pay for prostheses were reduced, with the goal of saving consumers $1.1 billion over 4 years.
Medical devices
In addition to the changes to the prostheses benefit, changes to benefits for medical devices on the Protheses List also came into effect on 1 February.
Power for PHIO
The Private Health Insurance Ombudsman (PHIO) will have increased power to conduct inspections, regular audits and other areas of oversight.
Private patients
Private patients that seek treatment in public hospitals will no longer be given preferential treatment over public patients.
Private hospitals
As of 1 January 2019, private hospitals can apply for second-tier default benefits directly to the Department of Health.
Secon tier reforms
These reforms aim to simplify administrative procedures, cut out unnecessary spending and increase transparency.
Working group
The Models of Care Working Group provides advice and ideas on how to improve mental health and rehabilitation services in Australia.

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Picture: Shutterstock, Unsplash

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