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 by land mass, 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?

Until recently, travel and accommodation were 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.

With the new reforms, that's all changed. Insurers can now offer travel and accommodation benefits under hospital cover, and for a fraction of what it costs under general cover.

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

It's worth noting though that it is not 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 benefits for transport 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. If your insurer decides to offer this benefit, it will be considered a perk and will not affect your costs compared to what others pay for the same policy.

At the same time, it can save you heaps on travel and accommodation compared to a policy without this benefit.

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 did these rural changes take effect?

The changes kicked off in April 2019. However, your insurer is under no obligation to provide this benefit. If they are not planning to offer it, 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. Over the past year and throughout the coming months, the government is making a whole host of changes in an attempt to improve the industry:

  • Four-tiered hospital cover. A new four-tier system has been introduced and this is making it easier to compare products.
  • Better access to mental health services. There is now improved access to mental health services, with the removal of waiting periods for people who are upgrading their cover.
  • 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

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