If you have private health insurance, you already know that it can be complex to completely understand your cover. This year, the Australian government introduced reforms to private health insurance to make it easier for you to choose the right cover.
At their core, the reforms are simplifying hospital cover into four categories: basic, bronze, silver, and gold. The reforms include discounts for young people, higher excess options to help lower your premiums, and travel and accommodation benefits for rural and regional members.
Let’s break down some of the reforms.
Improved access to mental health treatment
Back in April 2018, the government introduced changes allowing insured Australians easier access to mental health services and treatment. Patients who’ve held hospital cover for at least two months can now make a once-only upgrade for immediate access to private hospital psychiatric services.
The government recognised that mental health services and treatment for substance dependence are much needed and valued by Australians, particularly young people. Previously, people without psychiatric services in their cover would need to serve a two-month waiting period before being eligible for treatment.
Travel and accommodation benefits
Since April 2019, insurers can now offer travel and accommodation benefits under their hospital policies. This is an optional reform that can help with the costs of travelling from rural areas for private hospital treatment.
Voluntary higher excess and youth discount
The government has allowed insurers to offer a higher ($750 per person) excess on hospital policies to help reduce the premium. In return for a lower premium, the person chooses to pay a higher excess if admitted to hospital.
Previously, the highest excess allowed was $500 per person. An excess usually only applies to adults and not children who are admitted to hospital.
Further helping the hip-pocket, the government has also allowed funds to offer discounts on hospital premiums for young people aged 18-29. Those aged 18 to 25 at the time of becoming insured under an eligible policy may receive a 10% discount on their premium.
This is a bid to get more young people to sign up to private health insurance by making it more affordable. What’s more, once you have a youth discount, you’ll retain it until age 41 if you remain on that policy.
Gold, silver, bronze and basic cover
The introduction of the clearly defined basic, bronze, silver, and gold tiers of hospital cover also means that people know what they’re signing up for and what their cover includes.
This is helped by the introduction of clinical categories. As the government mandates:
“If a policy covers a certain clinical category, then it must cover everything described as part of the category – not only some things. For example, ‘bone, joint and muscle’ category, or ‘heart and vascular system’ category – they must cover all of the treatment within that category.”
Insurers have until 1 April 2020 to ensure all their hospital products comply with the gold, silver, bronze and basic tiers of cover.
Alternative therapies removed
After a government investigation which found a lack of clinical efficacy, insurers are no longer permitted to pay extras benefits on a number of alternative therapies. The therapies of remedial massage, acupuncture and myotherapy continue to attract extras benefits (if included in an extras policy).