Private health insurance reforms

The Federal Minister for Health, Greg Hunt has announced a wide ranging package of reforms to make private health insurance simpler for Australians with some receiving reduced costs.


The Government currently supports 13 million Australians with private health insurance at a cost of $6 billion per year.


Younger Australians will be encouraged to take up private health insurance by allowing insurers to discount hospital insurance premiums for 18 to 29 year olds by up to 10 per cent. The discount will phase out after people turn 40.


People with hospital insurance that does not offer full cover for mental health treatment will be able to upgrade their cover and access mental health services without a waiting period on a once-off basis. This will significantly enhance the value of private health insurance for young people.


To support regional and rural areas, insurers will be able to offer travel and accommodation benefits for people in regional and rural areas that need to travel for treatment.


The Government has also entered into an agreement with the Medical Technology Association of Australia to lower the price of implanted medical devices from 1 February 2018. This will have immediate benefits for consumers in the form of lower premiums from April 2018.


Many people would like to be able to make a higher excess payment in exchange for lower premiums. The maximum excess consumers can choose under their health insurance policies will increase for the first time since 2001. This will allow many consumers to reduce their premium increase in 2019 by increasing their up-front payments before being admitted to hospital.


The Government will act to simplify private health insurance by requiring insurers to categorise products as gold/silver/bronze/basic, and use standardised definitions for treatments to make it clear what is and isn’t covered in their policies.


The website will be upgraded to make it easier to compare insurance products, and insurers will be able to provide personalised information to consumers on their product every year.


After consultation with the private health insurance and medical sector, the Government has agreed to stop insurers from offering benefits for a range of natural therapies, such as Bowen therapy or Rolfing.


The Private Health Ministerial Advisory Committee will continue to examine issues such as risk equalisation, and we will work with the medical profession on options to improve the transparency of medical out-of-pocket costs.


Committees will be established to review funding methodologies for rehabilitation care and day-only mental health care to ensure that insurers fund the most efficient models of care.


The second tier default benefit, providing a safety net for consumers attending non-contracted hospitals, will continue, but the administration of eligibility will be transferred to the Department of Health.


13 October 2017.