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January 13, 2022
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Progress – Private Health Insurance Legislation Amendment Bill 2018, Parliament of Australia
House of Representatives
Introduced and read a first time28 March 2018
Second reading debate / second reading agreed to31 May 2018
Third reading agreed to31 May 2018
Senate
Introduced and read a first time18 June 2018
Second reading moved18 June 2018
Second reading debate10 September 2018
Second reading agreed to10 September 2018
Third reading agreed to10 September 2018
Passed both Houses11 September 2018
Assent (Act no. 101, Year: 2018)21 September 2018
New rules and clinical categories applied to reforms11 October 2018
Main changes in the exposure draft of the Private Health Insurance (Reforms) Amendment Rules (the Rules).
1. Amendments to age-based discounts. These now clearly define what the discount entails, compliance requirements for discounted policies and details on calculating and transferring discounts between health funds.
2. Matching hospital treatments to tiers. Clear definitions of which hospital treatments are included in the Gold, Silver, Bronze and Basic policy tiers.  See what’s covered in our category tier breakdown.
3. Changing from standard information statements (SIS) to private health information statements (PHIS). Amendments for the shift to the new statements. Customers will be able to receive information digitally if they choose so, rather than through the post. These new statements will include:

  • product information, including premiums, excess amounts and greater detail about what a policy cover (i.e. who is covered, services/treatments covered, relevant waiting periods);
  • any extra features that your policy might include (such as travel and accommodation benefits); and
  • a customer’s Lifetime Health Cover information (which was previously found in a Lifetime Health Cover Statement).

Also, insurers will no longer send out tax statements unless customers request it. Instead, relevant tax details will be sent directly to the Australian Taxation Office (ATO). Check out an example of a PHI statement.

4. Defining hospital treatments. An outline of the roposed new clinical categories and definitions of covered treatments and scope of cover.
5. Natural therapies removal list. Removal of coverage for natural therapy treatments, including a list of which treatments will be removed (the full list is included in appendix 3)
11 Main Changes In Private Health Insurance Reforms 2018
1. New health insurance clinical categories (38 in total) that outline exactly which hospital treatments are covered under each category and the extent of that cover, which all insurers must use from April 2019 onwards for new hospital products, and by April 2020 for existing products.
2. New category tiers for hospital policies – Gold, Silver, Bronze, Basic – which will each cover a minimum amount of clinical categories, and help customers easily compare (and understand) different policies. Insurers and health funds must use these tier names when naming their hospital policies, and cannot use the name of any other gemstone (e.g. diamond, platinum) in any hospital or extras policy. The new tiers do not apply to extras (general treatment) policies. Policies that cover more than the minimum requirement must include a ‘+’ or ‘Plus’ in the name. We explain what’s covered in the four-tiered health insurance categories.
3. Discounted premiums for customers under 30 who are purchasing hospital insurance. Customers can be offered a two per cent discount on their hospital premiums for each year they’re under 30, up to a maximum of 10%.

  • Ages 18-25: 10%
  • Ages 26: 8%
  • Ages 27: 6%
  • Ages 28: 4%
  • Ages 29: 2%

These discounts will start to gradually reduce after the customer turns 41, decreasing each year by two per cent until it’s reduced to nil or when the customer turns 45 and aren’t eligible for discounts. Discounts are only offered if the insurer chooses to do so on a particular product; no insurer is obliged to offer them by law, and the fund can choose whether the discount transfers from one policy to another when members who have a discount switch funds.

4. Extras policies will no longer include cover for 16 types of natural therapies. The natural therapies that will no longer be covered include Alexander technique, aromatherapy, Bowen therapy, Buteyko, Feldenkrais, herbalism, homeopathy, iridology, kinesiology, naturopathy, Pilates, reflexology, Rolfing, Shiatsu, tai chi and yoga.

Why? The National Health and Medical Research Council found ‘low to medium evidence’ or a ‘lack of evidence’ to conclude that natural therapies improved a person’s health condition, despite a Private Health Insurance Statistical Trends (Benefit) report by the Australian Prudential Regulation Authority (APRA) ranking natural therapies as the fifth most popular service claimed on extras policies.

5. Cover for mental health. Customers with limited private health cover will also be able to upgrade their cover once in their lifetime without serving a waiting period to access higher benefits for in-hospital mental health services, provided they have already served their initial waiting period for any psychiatric benefits (usually two months).
6. Travel and accommodation subsidies and benefits will be made available for regional Australians with private hospital insurance, for whenever they need to travel to access hospital services.
7. Higher voluntary excess. The maximum excess that funds can offer for singles policies will increase from $500 to $750, and family policies will have a maximum excess of $1,500 (previously $1,000). If customers opt for a higher excess on their policy, they’ll save money on premiums.
8. Cheaper prostheses for health funds. Insurers pay up to five times more for prosthetic medical devices (e.g. for hip and knee replacements). However, the reforms aim to reduce this price to make it cheaper for patients and health fund members.
9. More power to the Private Health Insurance Ombudsman. The ombudsman will be allowed to conduct inspections and audit health insurers directly to address customer complaints.
10. A ‘Private health information statement’ will replace the current ‘Standard Information Statement (SIS) as the required method for health funds to communicate with customers. Insurers must let their customers know of any detrimental changes at least 60 days before changing their policies.
11. PrivateHealth.gov.au website will be upgraded. The upgrade will provide personalised and up-to-date information on insurance products to make it easier for consumers to compare between products.

Sources

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