Parliament approves private health insurance reforms

Richard Laycock 15 September 2018 NEWS

Changes to health insurance aim to help consumers find the right policy.

It's finally happened. The private health insurance reforms that were laid out almost a year ago on 13 October 2017 officially passed on 11 September 2018. It's hoped that by passing this critical legislation, health insurance will become simpler and more affordable for all Australians.

So, what's changing?

Items on the docket include the following:

Discounted cover for the young

  • What's changing? Age discrimination has been legislated, and if you're between the ages of 18 and 29, you can get discounts on your health insurance premiums of 2% for every year you have hospital cover before the age of 30, up to a maximum 10%. This discount remains in place until you turn 40.
  • Why? It's hoped that discounted health insurance premiums might entice younger people to take out cover and balance out the risk pool, which in turn should curb the ever increasing cost of private health insurance.

New health insurance classification system

  • What's changing? Health insurance policies will now fall into a four-tier system: Gold, Silver, Bronze and Basic. In addition to this, products that meet and exceed the minimum standard can be labelled with a Plus (+).
  • Why? These coverage tiers mean that all policies within a tier must meet a minimum standard. This means that you'll be able to compare policies at a high level before digging a little deeper and getting into the nitty-gritty.

Maximum excess increase

  • What's changing? Currently, to avoid the Medicare Levy Surcharge (MLS), any single individual earning over $90,000 ($180,000 for families) needs to take out a private health insurance policy with a maximum excess of $500 ($1,000 for families) or get stung with a levy of between 1% and 1.5% of their taxable income.
    The changes will see that minimum excess increase from $500 for singles ($1,000 for families) to $750 for singles ($1,500 for families).
  • Why? It's hoped that higher excesses will mean lower health insurance premiums for those looking to avoid the MLS.

Simple and clear communication

  • What's changing? Health funds will be required to keep up-to-date "private health information statements" in the form of a single page of information that explains the products.
  • Why? The private health information statement is designed to take the guesswork out of knowing what is and isn't covered by a policy meaning clearer apples-to-apples comparisons.

Better cover for people living in regional Australia

  • What's changing? Hospital policies will now be able to cover the costs of travel and accommodation for those living in regional areas.
  • Why? It's hoped that these changes will provide support to people in regional areas who have to travel for treatment.

What does this all mean for you?

While you won't see any immediate impact these changes, as most of these reforms will not come into effect until April 2019 they will help you make a better choice when comparing products in the future.

Compare your health insurance options today

Latest health headlines

Picture: Shutterstock

You might like these...

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.
Ask a question
Go to site