What the private health insurance changes will mean for you
What the private health insurance changes will mean for you
You won’t be able to claim for yoga and Pilates anymore, but this is what you will be able to get back.
An overhaul of the private health insurance system will see cheaper premiums and easier access to mental healthcare introduced.
Health Minister Greg Hunt on Friday announced a major shake-up of the system, with those under 30 expected to be the biggest beneficiaries.
Young people are being targeted as they are generally healthy and less likely to claim.
“The more young people you have in the system, the lower the average cost of premiums for everybody,” Mr Hunt told ABC TV.
Health fund membership has been falling by around 10,000 people a month because of premium rises that have overtaken the inflation rate.
Premiums have increased an average of 5.6 per cent a year since 2010, but Mr Hunt wouldn’t put a figure on how much that will fall.
“I’m working with the private health insurers to help drive down premium pressures and they have guaranteed in writing they will pass through all of the cost savings,” he said.
An agreement with makers of hip and knee prostheses and cardiac devices will also save insurers about $1 billion over the next four years.
“And that will go straight through to reduce premiums,” Mr Hunt said.
The federal Health Minister claimed it was the biggest private health insurance reform in 15 years and was just the first round.
But Labor’s health spokeswoman Catherine King said young people will only save about 70 cents a week while older Australians won’t see a dollar returned to their back pocket.
“It’s clear from this package that the Turnbull government only cares about getting as many people as possible to sign up for private health insurance — it doesn’t care about what happens when they try to use it,” she said in a statement.
Labor, however, welcomed cuts to the cost of devices on the prostheses list.
Australian Medical Association president Michael Gannon said the move wouldn’t solve the issue of affordability, but it was a step in the right direction.
“The biggest problem in the affordability of private health insurance is the amount that’s going into the pockets of the for-profit insurers,” he told ABC radio.
“We need serious reform which addresses the simple fact that (healthcare) costs will continue to increase year on year.”
Here’s what it means for you.
Young people will get cheaper premiums
The changes will make policies cheaper for young people by introducing a premium discount worth 2 per cent per year for each year they belong to a health fund before turning 30, up to a maximum of 10 per cent. This will be phased out gradually by the time they turn 40.
It’s unclear whether the discount applies to under 30s who already have cover so it’s worth checking with your current insurer and to consider changing policies.
You won’t be able to claim for pilates or yoga
According to The Daily Telegraph, rebates for unproven natural therapies will be banned. Those on the chopping block include Alexander technique, aromatherapy, Bowen therapy, Buteyko, Feldenkrais, herbalism, homoeopathy, iridology, kinesiology, naturopathy, pilates, reflexology, Rolfing, shiatsu, tai chi, and yoga.
Better mental health cover
Even policies classified as Basic will be covered for mental health services, which many policies currently don’t cover.
Consumers who already have a policy will also be able to upgrade their cover to access in-hospital mental health services without a waiting period.
Insurers also won’t be able to limit the number of sessions or treatments a patient can access.
New rural health product
Travel and accommodation benefits will be included under hospital cover for those taking up a new rural health product.
You’ll be able to increase your excess to reduce premiums
The cap on excesses (the extra money people agree to pay if they go to hospital or have other expensive procedures like dental) will be lifted to $750 from $500 for singles and to $1500 from $1000 for families.
This could see policies becoming a bit cheaper.
Price rises should decrease
For those who already have cover, you have been slugged with premium rises of about 5-6 per cent in the past few years.
The reforms hope to get this down to about 3 per cent.
Crackdown on prostheses and medical devices
The government is cracking down on the exorbitant amount of money health funds are paying for prostheses like hip and knee replacements.
In what has been described as a rort, health funds have been paying prices for medical devices that are up to five times higher than prices paid by public hospitals.
This has helped to drive up premiums.
By cutting these costs, it should become cheaper for patients who need things like pacemakers, implanted defibrillators, hip and knee implants.
Health funds have also promised to pass on savings to consumers overall and the government has strengthened the powers of the Private Health Insurance Ombudsman to ensure this happens.
Private Healthcare Australia chief executive Dr Rachel David told The Daily Telegraph that the $1 billion in savings over four years was expected to cut premium increases by about 1 per cent a year, according to its calculations.
Making it easier to choose
Comparing policies can be very difficult and while websites like iSelect and Compare the Market claim to do this, they get commissions from health funds and don’t always show all the options.
As part of the changes, the privatehealth.gov.au website will be upgraded to suggest policies from every health fund. People will be asked what they want to be covered for and what their income is.
More clarity about what’s covered
Policies will be classified as Gold, Silver, Bronze or Basic and each of these will have to meet certain coverage standards.
The minimum requirements will be set in 2017—18.
‘Junk policies’ will remain
Basic entry policies that only cover treatment in a public hospital will continue as people on these policies may have been forced to pay up to 16 per cent more to move up to the next level of cover.
The Australian Medical Association has raised concerns about so-called ‘junk policies’ because they don’t cover many illnesses.
For example, people may have paid premiums for many years, only to discover things like hip or knee replacements are not covered under their policy.
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