Private Health Insurance Reforms

In 2019, the Australian government introduced reforms to private health insurance to make it easier for you to choose the right cover.

Private hospital cover is now arranged into four categories: basic, bronze, silver, and gold. The reforms also allowed insurers to offer discounts for young people on certain hospital products, higher excess options became available, and travel and accommodation benefits for rural and regional members became an option for insurers.

Improved access to mental health treatment

In 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 2019, insurers may 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 aged-based 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 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 an age-based 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.

Each tier of cover available in Australia must include the same minimum 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.”

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).

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