From the 1st April 2019, the landscape of health insurance in Australia is changing. With private health insurance being an important issue to many Australians, with approximately 55% of all Australians covered by private health insurance, consultation with consumers have revealed that hospital insurance products are complex and difficult to understand.

What to know!

It is important to understand the new Health Insurance Reforms and knowing how the reforms will affect Private Health Insurance from the 1st April 2019 will have two key benefits:

  1. It will ensure that you are fully covered: with so many changes to the Private Health Insurance landscape, particularly with the introduction of the Hospital Treatment Product Tiers, it is crucial that you understand your Private Health Insurance cover, ensuring that you are covered for all your requirements
  2. It will allow you to compare and find better deals: With the number of initiatives designed to reduce the costs of Private Health Insurance, with research and insight, you would be able to make more informed decisions on the products that you want out of your Private Health Cover.

New Hospital Treatment Product Tiers Introduced

A new system of categorising hospital health insurance products will come into effect from the 1st April 2019, with a simplified product tier for hospital insurance products making it easier for the consumers to understand. There will be four tiers of hospital cover – Gold, Silver, Bronze and Basic. These will be introduced when the new reforms kick in on the 1st April 2019, with Australian Health Insurance providers having until 1st April 2020 to adopt the tiers for all products.

The new classification system will enable you, the consumer to see exactly what would be covered under each new tiered level of cover. It is designed to enable you to determine the right kind of hospital cover required to suit your needs. The requirements for each product tier are minimum standards, with the system designed to allow the majority of existing policies to be transferred or merged into the new product tiers.

View the new hospital product tiers here:

Who will benefit?

Almost everyone should benefit from the introduction of the new hospital cover product tiers. They are designed to give consumers better understanding and certainty surrounding the services that would be covered as a minimum under each tier.

These changes should also enable you to shop around with the Australian Health Insurance providers to compare the different hospital treatment products to ensure that you find one that meets your needs.

Women are also the biggest winners with the new product tiers as it allows those with breast cancer to receive any necessary breast cancer surgery with the Bronze and above product tier. Women would also be able to access gynaecology within some of these products.

What are the other reforms?

While there were some reforms announced by the government in October 2017, more notable reforms were announced, these included some notable changes such as:

  • Age-based discounts: To provide more incentive for younger people aged 30 years and under, a reduced premium may be provided to eligible consumers for when they first take out hospital cover. Working on a scalable basis, younger people may become eligible for a reduction on their premiums working on the cumulative 2% discount depending how far below the age of 30 you are. For example, a 29-year-old would be entitled to a 2% discount whereas a 28-year-old, would be entitled to 4%.
  • Higher maximum excesses: According to the HCIA, the government has raised the maximum permitted excess payment amounts to counteract for the rising cost in premiums. This would allow you to reduce your monthly premium payments but increasing your excess claim payments. In 2018, health insurance premiums rose by 3.95 percent with a further increase set to come into place at the start date of the new reforms.
  • Mental Health: If you require access to Mental Health Services, the new reforms will allow you to upgrade your cover allowing you access to receive better levels of mental health care whilst reducing the limits that were previously imposed.
  • Natural Therapies: One of the other major reforms to Private Health Insurance coming into effect would be the removal of a number of natural therapies from the General Treatment Policy. A list of natural therapies that would no longer be covered can be found here. A review chaired by the former Commonwealth Chief Medical Officer, found that there was no clear evidence to support the efficacy of a number of natural therapies, and in eliminating these, it would allow a reduction in the cost of premiums and lead to an increase in the number of people taking out private health insurance.