‘Why is my health cover “bronze” now?’Beryl, 58, VIC
‘Wait, there’s discounts now? Wait, prices are going up again?!’Dave, 32, NSW
Yep, the health insurance reforms can be confusing. Some health insurance policies changed on 1 April 2019, while others will change by April 2020.
And surely having the wrong cover is like having no cover at all?
Relax! Take a deep breath.
*In, and out.*
We’re here to make it all simples.
Perhaps the most significant change in the health insurance reforms is the new hospital policy classification system. There are now four standard tiers – basic, bronze, silver and gold – with each having a set number of treatments they must cover. The higher your tier, the more treatments you’ll be covered for.
There are also basic, bronze and silver ‘plus’ or ‘+’ policies, where an insurer offers additional treatments than what is mandated by that tier. This effectively means there are seven tiers of insurance, and all health funds have until 1 April 2020 to move their hospital policies over to the new system.
Those facing some of the most significant changes may be the ones who can no longer claim on services they rely on (i.e. they’ve had benefits removed from their policy). While the changeover makes it simpler to shop around for the right hospital insurance, it means old policies need to be re-classified. Some customers may gain coverage; some may lose coverage.
Younger Aussies now have more reasons to take out cover; they could reap up to 10% off in discounts on hospital cover until the age of 41.
Here’s how it works: if you’re under the age of 30, you qualify for a discount on private hospital insurance. Until the age of 25, the discount is 10%, then goes down by two per cent until you turn 30
In addition, funds can now create policies with a higher excess. Basically, there’s never been more ways to save on the overall cost of hospital cover!
The age-based discount is optional though, meaning that the funds don’t have to offer policies that include an age based discount. So if you’re in the age bracket, you’ll want to get onto your health fund over the phone and see if they offer it on your policy, and if not, you may want to consider finding a policy that does.
Extras policies have changed too. They no longer include cover for 16 types of natural therapies; including aromatherapy, homeopathy, tai chi and yoga. This was based on The Natural Therapies Review in 2015, which found there wasn’t enough clinical evidence to justify including them in insurance.[i]
This part of the private health insurance reforms was intended to help reduce costs for insurers and customers.[ii] However, there is a review running during the 2019 to 2020 financial year to see if there’s any new evidence or information that was missed in the previous review.[iii]
Health funds can now help pay some of the travel and accommodation costs for Aussies needing to travel long distances for specialised hospital care under private hospital cover.
Additionally, those who had limited cover for psychiatric care can upgrade their insurance for higher benefits without serving a waiting period, once in their lifetime. Limits on the number of mental health sessions or treatments a patient can access as a condition of their insurance policy were removed. , providing greater insurance coverage for mental health.
There are a few different reasons why the Australian Government introduced the health insurance reforms. First and foremost, according to Greg Hunt, MP, was to make health insurance simpler to understand and more affordable.4
The new hospital classification system means all health funds need to use the same terms and language when talking about cover. With minimum requirements specified for each level, this makes it much easier for customers to compare their options, as noted by the Department of Health.[v]
Conversely, introducing the age-based discount and the option to increase excess payments was designed to help Australians save on their insurance, as stated by Hunt in 2018.[vi]
When more people take out private health insurance and seek private care, this eases pressure on the public health system. The private health insurance reforms are designed to strengthen the industry and make it easier to navigate for customers.
Hospital insurance now comes in seven easy-to-understand tiers, but your old policy might have lost or gained coverage in the changeover. Or, your policy may still be awaiting these changes.
Want up to 10% off private hospital cover? If you’re aged between 18 and 25, this could be you! Those aged 26 to 29 get a discount too, plus, your discount can last until you’re into your 40s. It’s up to health funds decide what policies offer the discount, though.
The best action you can take is to be decisive and figure out how these changes might affect you. We understand that it can be intimidating to try and understand some of the complexities of health insurance, though, so we’ve put together some resources to help you.
Here’s a checklist of how to deal with all this health insurance ‘nonsense’!
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