Health insurance reforms: Improving cover for regional and rural customers

If you live outside a major city, here's how the changes will help.

Australia is the sixth largest country in the world, which means it can be very hard for people outside the major cities to access the medical care they need.

The Australian government has recognised the need to provide our rural population with better healthcare. If you live outside a major city and there isn't a medical facility near you, or long distances make accessing it difficult, here's how the reforms can help

What's changing for rural healthcare?

Currently, travel and accommodation are only included in general cover. However, if you live in a rural area, it's likely that you're dependent on one or the other when in need of medical treatment.

As of 1 April 2019, that's changing. Insurers will be able to offer travel and accommodation benefits under hospital cover, and for a fraction of what it cost under general cover.

In order to combat high premiums, the government is allowing travel and accommodation benefits to be included in risk equalisation calculations. This means that insurers will be able to better spread their risk so that those in need of travel and accommodation won't be hit with significantly larger premiums. Rather, it will give insurers an incentive to offer better travel and accommodation benefits.

It's worth noting though that it will not be mandatory for private health insurers to offer travel and accommodation benefits.

How will rural health reforms impact you?

Proportionately more people aged 50 years and over live in small towns than in major cities. The elderly traditionally need more care, which is partly why the government has been prompted to look beyond healthcare in the cities. If you are a private health insurance (PHI) user, improved transport services and accommodation will make it easier for you to access your health facilities when you need them.

Not only will the changes benefit anyone living in rural and remote areas of Australia, it will also benefit their carers, as it makes access to treatment considerably easier.

How will it impact your costs?

The change is designed to improve the value of private health insurance for you. When considering whether you need medical treatment, the cost of your travel and accommodation shouldn't be a factor. Yet until this change comes into effect, travel and accommodation can be very expensive for anyone forced to travel into the city for medical treatment.

Why is rural healthcare changing?

If you live in a regional or rural area, it's very likely that in order to access private health facilities, you need to travel to larger urbanised areas or cities. It's often the case that your local town simply doesn't have the demand for specialist medical and hospital treatment to support your specific needs.

At the moment, around half of all private health insurers offer benefits for travel and accommodation for members who need to travel to access specialist medical and hospital services. Generally though, only members with a high level of extras cover have access to travel and accommodation. In recent years, the benefits offered haven't kept pace with the costs, which is why the government is doing something about it.

When will these rural changes take effect?

The changes will begin to come into place on 1 April 2019. However, because they are voluntary, your insurer is under no obligation to provide the improved service. If they are not planning to change, it's worth shopping around to see who is and weighing up the potential benefits of switching insurer.

What else is changing across healthcare in Australia?

People living in rural and remote areas are not the only ones benefiting from PHI changes. In the past year and coming months, the government is making a whole host of changes in an attempt to improve the industry:

  • Four-tiered hospital cover. 2019 will see the introduction of a new four-tier system, which will make comparing products easier.
  • Better access to mental health services. There will be improved access to mental health services, with the removal of waiting periods.
  • Cheaper cover for under-30s. Discounts for 18- to 29-year-olds and cuts to some natural therapies to help lower rising insurance costs

Picture: Unsplash

Gary Hunter

Gary Hunter is a writer at Finder, specialising in insurance. He has a Bachelor of Arts in English Literature from the University of Glasgow and has previously worked for Real Insurance as a content specialist. Gary loves language, the way it has the ability to engage, entertain and anger people, and always aims for the first.

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