The private health insurance reforms

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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.

Here’s what’s changing in the private health insurance reforms

A number of health insurance policies changed overnight on 1 April 2019, but most Aussies didn’t feel prepared for that change.

In fact, our survey showed that three in four of our respondents didn’t believe they were getting enough notice.*

To give you the key info, our private health insurance reforms summary breaks down the changes.

* Survey conducted by Pureprofile December 2018

The new hospital tiers

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.

Discounts and excess options

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.

No more cover for 16 alternative therapies

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]

Easier cover for rural families and mental health

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.

Why are the private health insurance reforms happening?

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.

Advantages & disadvantages of the changes


Tiers make hospital policies more straightforward

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.

Learn More


Aussies under 30 could receive a discount

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.

Learn More

Here’s what you should do about the private health insurance reforms

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.

Don’t bend over backwards to find health insurance that fits

Talk to the experts. Talk to us!

Whether you use our online comparison service to check if your cover is still terrific value, or you give us a call to have a chat with us about your options; you can rest easy that you did all you could to make sure (a) your health needs are met, and (b) you’re not overpaying.

It’s the very essence of ‘Simplesness’


i. Review of the Australian Government Rebate on Natural Therapies for Private Health Insurance. Chris Baggoley, Natural Therapies Review Advisory Committee, Department of Health, Australian Government. 2015.

ii. Private health insurance reforms: Changing coverage for some natural therapies. Department of Health, Australian Government. 2019.

iii. Natural Therapies Review Expert Advisory Panel. Department of Health, Australian Government. 2019.

iv. Major reforms to make private health insurance simpler and more affordable. Greg Hunt. 13 October 2017.

v. Private health insurance reforms. Department of Health, Australian Government. 2019.

vi. The lowest private health insurance premium change in 18 years. Greg Hunt MP, Liberal Member for Flinders, Somerville, Victoria, Australian Parliament. 2019

So, what are you waiting for?

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Or call us on 1800 304 709