In early September 2018, the Government passed an amendment to the private health insurance legislation. With the goal to make health cover simpler and more affordable for Australians. The changes as a result of this amendment, were rolled out on 1 April 2019. So what are some of the major health reform changes and how might they affect you?
A simplified tiered system
To make it easier for everyday Australians to identify, compare, research and take out health insurance, a tiered system for hospital cover is now mandatory for all insurers. Consumers will be able to choose from Gold, Silver, Bronze or Basic Hospital Cover. The easily identifiable tiers are designed to make policies more understandable and comparable.
What’s in and what’s out in each policy
The Government has clearly defined treatments and services, known as clinical categories, which must be included at each product tier level. This means that there are a number of treatments which must be included in each tier but the insurer also has the ability to add further treatments should they wish. It also means that all insurers will use the same language for hospital procedures to minimise confusion by everyone.
Some natural therapies have been removed
A number of natural therapies are no longer covered on any Extras policy. Chinese medicine and remedial massage will continue to be allowed to be covered.
There are some non-compulsory items too
- Age-based discounts for 18-29 year olds may be offered to encourage younger Australians to take out health insurance.
- Hospital policies are now allowed to offer travel and accommodation benefits for those living in regional areas.
- The excess that you choose when signing up for your policy is now allowed to be increased.
Mental health access
Those on low-tier policies who have limited access to mental health cover will be given the option of having their waiting periods waived if they want to upgrade their policy to access mental health services. This reform came into effect on 1 April 2018 and aims to allow people to get access to in-hospital mental health services when they need it. However, the two-month waiting period can only be waived once.
Changes to Prosthesis List benefits
The government has recently lowered the minimum benefit repayable for most of the items named on the Prosthesis List (e.g. surgically implanted prostheses, human tissue items and other medical devices).
If you’re interested in learning more, you can always read the full Department of Health document - Private health insurance 2017 reforms.
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Hospital Cover FAQs
In Australia there are two types of private health insurance: Hospital cover and Extras cover (also known as ancillary cover). You can mix n’ match all of our cover options until you find a combination that suits your needs.
Hospital cover is private health insurance that includes cover if you need overnight or same-day treatment in hospital as a private in-patient. It helps cover the cost of treatment in hospital as well as other costs such as accommodation, and theatre fees which are itemised in the Medicare Benefit Schedule (MBS).
Your level of cover determines which specific hospital treatments and services are included in your hospital cover. These services reflect the Clinical Categories which sit within the Government’s Basic, Bronze, Silver & Gold tier structure for hospital products.
When you have private Hospital cover and treatment is required, the Australian Government will pay 75% of the MBS fee that your doctor charges and your hospital insurance policy will cover the remaining 25%. In cases where the doctor charges more than the MBS fee, there may be a “gap”. That’s why most health insurers like us have a “gap cover” arrangement in place. Our AccessGap Cover allows you to find a doctor who may agree to opt-in to an arrangement with us prior to undergoing your treatment – this can help to minimise any potential out-of-pocket expenses. Find out more about AccessGap cover here.
When you have private Hospital cover, you can choose to be treated as a patient in a private hospital, or as a private patient in a public hospital. As a private patient in a public hospital, you’ll be able to choose your own doctor, rather than being allocated a doctor that the hospital chooses. Unless you’re getting your choice of doctor or a private room, we suggest that you consider not using your private health cover in a public hospital.
No, Medicare only pays for treatment in public hospitals. Public patients in public hospitals don’t have any choice over which doctor they see or the date of their treatment or surgery. The hospital appoints the doctor, and treatment dates will depend on availability and waiting lists. In some areas the waiting list for non-emergency surgery can be over 12 months.
If your doctor charges more than the Medicare Benefits Schedule (MBS) and does not opt-in to participate in Access Gap, you may incur significantly more out-of-pocket expenses. That’s why we always encourage our Members to ask their doctors or specialists if they’re treating them as an Access Gap patient. We have arrangements in place with more than 30,000 doctors. Find out more about gap cover here.