Private Health Reforms: What they mean for you

It’s being heralded as the biggest overhaul of private health insurance in almost 20 years, but what exactly will the Federal Government’s recent announcements about private health insurance mean for your wallet if you’re an over-50 policyholder? 

We look at just how affordable the changes are and how they’ll impact you.

10% discount for under-30s

If you’re paying for your children’s health insurance then you'll be pleased to know that there’ll be discounts of up to 10% for the under 30s. Funds will offer this at 2% a year for up to five years for young people aged between 19 and 29. The discount will only remain in place until they’re 40 though and then it’ll be phased out.

The change is designed to encourage more young people to take up private health insurance, but the reality is that unless health funds can get another 50,000 young members to join, you’ll be stuck having “to pay higher premiums to cover the cost of the incentives”, according to an article in the Herald Sun.

Gold, Silver, Bronze categories

The change in categories was better news for over-50s. If you haven’t switched your health insurance before because of the confusing similarities and differences between policies, then the government’s move to introduce a simple rating system of gold, silver and bronze will be a welcome change.

To break it down: Gold cover will include everything, silver will have an excess, bronze will have exclusions and there’s a basic cover, the details of which are yet to be revealed. The changes should mean you’ll be able to switch providers with more confidence.

Prostheses reform

It’s welcome news that the cost of essential procedures for implants such as hip and knee replacements, and pacemakers, will come down in price. You should see a difference in your premium, which will likely increase by $100 or $200 next April, instead of $300 or $400.

With many over-50s wondering how they were going to afford the rising cost of premiums, this is a great outcome. Health insurance premiums have been increasing by an average of 5.6 per cent a year since 2010, which has made private health care unaffordable for hundreds of thousands of Australians.

CHOICE recently reported that, “The ACCC found Australians downgraded 400,000 top-cover hospital policies in the two years to June 2016.”

Higher excesses

Paying a higher excess helps to keep the cost of your health insurance down. But, of course, if you’re admitted to hospital for any reason, the excess is the amount you agree to pay to cover the costs of your accommodation.

If you’re willing to opt for a higher excess limit in a bid to lower your premium, then you’ll be able to do that under these reforms and potentially shave hundreds off your outgoings.

The limit will lift from $1,000 to $1,500 for families and from $500 to $750 for singles. The government says, “This will allow many consumers to reduce their premium increase in 2019.”

Natural therapies

If you’ve been getting rebates for your homeopathic or “natural” therapies then that will stop under the reforms. Rebates for Bowen therapies or Rolfing have been axed.

It could also mean you may not be able to get money back on a whole host of therapies, including reflexology, Pilates and kinesiology.

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