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Private health insurance reforms : Are you still covered?

private health reforms

The Australian Government has announced a series of reforms designed to make private health insurance simpler and more affordable for all Australians. If you think private health insurance is expensive and that policies are difficult to understand, then there’s some good news on the horizon reveals iSelect spokeSwoman, Jessie Petterd.

The Australian Government has announced a series of reforms designed to make private health insurance simpler and more affordable for all Australians. While in the long-run these changes will make it easier to understand and compare private health insurance, in the short-term you may be confused as to exactly how you own cover might change.  

In this article we’ll discuss some of the key changes to help you understand how they may affect you.

New policy tiers for hospital products

Starting 1 April 2019, private hospital insurance products will be categorised into four tiers of cover: Gold, Silver, Bronze and Basic. These new categories will make it much easier to understand what exactly a policy does and doesn’t cover.  Note the Gold/Silver/Bronze/Basic labels will be applied to hospital policies only, not extras.

There will be minimum standards outlining what hospital services and treatments must be included for that tier.  For example, all silver policies must cover heart and vascular system while all gold policies must cover cataracts.

To make policies easier to understand, all insurers will be required to use the same, plain English clinical categories to define what treatments and services are covered under their policies. This means when a fund says it covers hip and knee replacements or cataract surgery it covers exactly the same procedures as every other fund that promises to cover these services.

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Some policies will change as a result of the new product tiers and its important customers understand exactly how their level of cover may change. While many changes will be positive, with additional services and treatments included, some customers will be impacted by detrimental changes to their policy. 

A detrimental change to a policy means you will no longer be covered for things you were previously. It’s essential to ensure that you’re fully aware of any detrimental changes to your policy and make a decision as to whether you need to switch to a more appropriate policy.

Higher excess levels for lower premiums


From 1 April 2019, insurers will be able to offer customers a higher excess in exchange for lower overall premiums. This would reduce the amount you pay each month and help make private health insurance more affordable.   

The maximum excess will increase from $500 to $750 for singles and for families from $1000 to $1500, although they will not be available on all policies. Opting for a higher excess could save $200 a year on a single policy and up to $350 a year on a couple’s policy. 

Removal of natural therapies


One of the biggest changes to take place as a result of the reforms involves natural therapies. From 1 April 2019, most (but not all) natural therapies will no longer be covered under your extras policyThis decision follows a review by the former Commonwealth Chief Medical Officer, which found that there is no clear evidence to support the effectiveness of most natural therapies. It’s hoped that removing the rebate for these natural therapies will help reduce the cost of private cover.  

The only natural therapies that will still be covered are remedial massage, Chinese medicine and acupuncture. 

Natural therapies no longer covered include homeopathy, naturopathy, yoga, herbalism, tai chi and aromatherapy. Pilates will no longer be covered, unless provided by a registered physiotherapist under your physiotherapy limits (and this could vary between funds).  

Improved benefits for rural and regional customers


From 1 April 2019, insurers will be able to offer travel and accommodation benefits under hospital cover (currently around half of insurers offer travel and accommodation benefits for regional customers but generally only as part of top level extras cover). This change is great news if you live in regional or rural Australia and may need to travel to larger cities for specialist medical and hospital treatment.

Not all hospital policies will include these regional benefits so if you do live outside a capital city it may be worthwhile shopping around and finding a policy which does offer them.  

How can I make sure I’m still covered for what I need?


Finding the right health insurance policy can sometimes be confusing at the best of times and many customers may be overwhelmed by these new changes. Services like iSelect have highly trained private health insurance experts that can help you understand the upcoming reforms and explain to you exactly how your policy may be affected in terms of price and the level of cover. Visit iselect.com.au for more information or speak to one of our health insurance experts on 13 19 20. 

About the author

Jessie Petterd

Jessie Petterd is a spokeswoman for iSelect. At iSelect, we’re passionate about helping Australians reduce their household bills and save money, time and effort.

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