Are you in the dark about the private health insurance reforms?

Have you heard about the upcoming private health insurance reforms? Do you know what changes are coming into place and how they will affect you?

If you answered “No” to all those questions, you are not alone. Concerning new research from leading financial comparison site comparethemarket.com.au found that 65 per cent of private health insurance customers aren’t aware of these reforms and don’t know how it will affect them.

These changes are set to shake up the industry after April 1 by improving affordability and reducing confusion around health insurance. They include:

• The introduction of four new tiers of hospital cover – Gold, Silver, Bronze and Basic – which will make it easier for consumers to shop around and compare different hospital treatment products.
• The implementation of new health insurance clinical categories that outline which hospital treatments are covered under each category, and which policy documents will cover the extent of the coverage.
• The removal of 16 types of natural therapies under extras policies, some of which include aromatherapy, Bowen therapy, homeopathy, naturopathy, pilates, tai chi and yoga.

Despite these changes, three in four (75 per cent) Aussies think that the government and industry aren’t doing enough to help consumers understand the reforms, and a large majority (76 per cent) are concerned that they aren’t being given enough time to check their policies.

Additionally, this year’s health insurance rate rise will be the lowest in 18 years, increasing by an average of 3.25 per cent. However, it’s likely that this will still impact many people’s back pockets, particularly those who are already struggling to afford their health cover.

Jenny Williams, health expert at comparethemarket.com.au, shares her top six tips on what Aussies need to look out for in their private health insurance policies and how they can bring down their premiums.

• Health insurance policies are contract free. Switching health insurance policies is possible at any time with most insurance companies being contract free. If you find a policy better suited to your needs that saves you money, you can easily change over to a new provider. Any premiums paid in advance will be refunded to you and your new policy will start the day after your old policy ceases. Any waiting periods you’ve already served will be transferred over to the new policy too.

• Only pay for what you need. Find out what your policy covers you for and if it still suits your needs and lifestyle. For instance, paying for obstetrics and IVF may not be relevant if you are in the later stages of life. Instead, you can add treatments that are more suitable for your life stage such as joint replacement (hips, knees, etc.), prostheses and cardiac surgery. Evaluate what extras you will use and need such as optical, physiotherapy and chiropractic treatment to optimise your health cover.

• Make the most of payment discounts. Look out for health funds that offer a discount if you elect to pay by direct debit. Some funds offer up to 4 per cent off your annual premiums if you set up an automatic direct debit from your bank or savings account. This might not seem like much however, it could be a saving of $100 for an older couple paying $2500 per annum. Insurers may also provide further benefits during promotional periods such as getting a month worth of free health insurance when you take out cover with certain providers.

• Take advantage of government rebates and concessions. If you are eligible for Medicare and your income falls below a specific threshold, then you are eligible to claim the government’s private health insurance rebate. The older you are, the higher the amount you receive which can be used to reduce your premium. Additionally, once you turn 65, you may qualify for a Commonwealth Senior Health Card which is a concession card for seniors to subside the cost of medical treatments and services.

• Compare policies to make sure you are getting the best value for money. It’s vital to shop around to find the best health cover for your needs and lifestyle that offers a range of health products and services at a price you can afford. Even if you are currently with a provider, you can use comparison sites such as comparethemarket.com.au to double check that you are still getting the best value for money. 

• Adjust your policy to fit your lifestyle. Look at the type of health policy that you are currently on; does it reflect your marital status or current living situation? For example, if you’re still covered by a family health policy and paying extra to have your children on your policy, it might be time to consider switching to a couple or singles policy which can be more affordable.

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