Health insurance reforms

HEALTH INSURANCE REFORMS

From more affordable private health care for young Australians, to a greater emphasis on mental health, the Australian Government announced some major changes in the new private health insurance reforms in October 2017.


These reforms are set to shake up the industry with a huge focus on young people, as well as reduced costs for services like hip replacements, and cardiac devices. 


The health insurance changes take effect from late 2017 to 2019, depending on the reform, and are set to have a huge impact on your healthcare.


YOUR MENTAL HEALTH WILL BE A TOP PRIORITY

From April 1, 2018, if you have limited mental health cover, you will be able to upgrade your cover to access in-hospital mental health services, without serving a waiting period. You can only use this waiver for the existing 2-month waiting period once. Also, the limits on the number of mental health sessions will be removed.


This is a welcome change as mental health is fast become one of the leading causes of hospitalisation. 


YOUNG AUSTRALIANS WILL GET DISCOUNTED HEALTH INSURANCE

One of the biggest changes to come out of the private health insurance reforms is that insurers may offer a discount on health insurance premiums for young Australians.


From April 1, 2019, insurers will be able to offer a discount of up to 2% for each year that someone is aged under 30 – up to maximum of 10% on their annual premiums for private hospital cover. The discount will remain in place until that person turns 40, and from there it will gradually phase out.


This change aims to make it easier for young people to sign up for private health insurance, while helping absorb the costs of older Australians who make more claims on average than their younger counterparts. An increase in the number of young people with private insurance could also help lessen future private health insurance premium increases.


HIP AND KNEE REPLACEMENTS AND CARDIAC DEVICES WILL BE MORE AFFORDABLE

Another big win in the private health insurance reforms is the lowering cost of knee and hip replacements, and cardiac devices. These changes will roll out on February 1, 2018, with further discounts being applied on February 1 in 2019 and 2020.


REBATES FOR YOGA AND OTHER ALTERNATIVE THERAPIES WILL BE BANNED

From April 1, 2019, your insurance policy will be ranked as either Gold, Silver, Bronze or Basic for hospital cover (or Gold, Silver and Bronze for extras cover) to create transparency, and the ability to compare the value of different policies. Although you won’t see the new ranking system until 2019, prepare to hear it being discussed by the media and some insurance providers in 2018.


AUSTRALIANS IN RURAL AREAS WILL HAVE BETTER ACCESS TO HEALTHCARE

For Australians living in rural areas, you’ll be able to get travel and accommodation cover through your hospital policy, not just through extras cover, from 1 April, 2019. 


While not all health insurance providers offer this, it’s great news and is making private healthcare more accessible to Australians in regional areas.


YOU COULD GET BETTER VALUE FROM YOUR HEALTH INSURANCE PROVIDER

If you already have private health cover, you will be notified about any relevant changes in the private health insurance reforms in writing from your fund. 


YOU CAN CHOOSE TO LOWER YOUR PREMIUMS BY INCREASING MAXIMUM EXCESS LEVELS

You can choose to lift your cap on excesses from $500 to $750 for singles, and from $1,000 to $1,500 for families, saving you money on your premiums.