What are the Private Health Insurance Reforms?

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Updated 29/02/2024
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Written by

Luke Carlino

Updated 29/02/2024

What changed?

Moderate rewrite for timeliness and tone
Our aim is to help you make better informed decisions. That’s why iSelect’s content is produced in accordance with our fact-checking and editorial guidelines.

Edited by

Laura Crowden

Find out more about how we make money.

View our Privacy Policy.

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The 2019 reforms
The 2021 reforms
Are further reforms needed?
Where can I find and compare Health Insurance?

The 2019 reforms 

In 2019, there was a big Health Insurance shake-up – it was like a whole new world of coverage. From new Hospital Cover categories to a mental health boost, here’s everything that was tweaked: 

Hospital Cover tiers 

The government separated Hospital Cover policies into new tiers – Gold, Silver, Bronze, and Basic. Each tier comes with its own set of treatments; Gold is the fancy stuff (obviously), and Basic is, well, the basics. This makes it easier to compare Hospital Policies from different providers – you can be confident that each tier contains the same minimum mandatory treatments

Mental health treatment waiting periods  

As of 1 April 2018, you can sign up for Hospital Cover for in-hospital psychiatric treatment and access those services without having to wait two months. However, keep in mind that this exemption is a one off, and only applies once per lifetime.  

Exclusion of natural therapies 

Expecting to claim for that Feldenkrais or naturopathy session? Before 1 April 2019 you might have been able to, but sadly, that time has passed. Health Insurers are no longer able to offer benefits for many natural therapies, from aromatherapy to shiatsu. But some natural therapies can still be covered under Extras policies, including remedial massage, myotherapy, Chinese medicine and acupuncture.  

Change in excess levels 

To skip the Medicare Levy Surcharge, your Hospital Cover excess (the amount you pay up-front) needs to be below a certain threshold. These thresholds got a little tweak to be a bit higher – $750 for singles and $1,500 for the fam.  

Private Health Information Statement (PHIS)  

A PHIS is a summary of your policy your insurer can send you. It spills the beans on what your policy covers and what it doesn’t, all based on those new tiers. It’s like your Health Insurance cheat sheet, delivered straight to your mailbox. 

Discounts for 18 to 29 year olds 

If you’re in that 18–29 age bracket, you might score a deal – insurers can offer up to 10% off your Hospital Cover premiums. Even better, if you nab the discount, you can potentially hold onto it until you turn 41. 

Information about discontinued policies 

If your insurer wants to cancel your policy and offer you a new one, they’ve got to provide clear and transparent information about how the change affects you. 

Travel and accommodation benefits for rural consumers 

If you’re in a regional area, insurers might throw in some travel and accommodation perks. Sometimes you’ve got to hit the road for medical stuff, and they could have your back with those extra benefits.  

The 2021 reforms 

A second wave of reforms arrived in June 2021. It wasn’t as in-depth as the first wave, but it still had some important stuff in it.  

Increase to the age of dependents 

The government bumped up the age limit for dependents on Private Health Insurance policies. They stretched it from 24 to a whopping 31 years. So, if you’re still riding that dependent train and you’re between 18 and 31, you’re in the zone – however, your insurer might have their own rules. Let’s say they used to cap the age limit at 24; if they wanted, they could stretch it to 29 instead of the government’s cool 31.  

If you’re participating in the National Disability Insurance Scheme (NDIS) and over 18, you’re in the mix too – there’s no limit to the age you can be considered a dependent.  

Expanding home- and community-based mental health and rehab care 

Access to mental health and rehab services at home and in the community levelled up, including more options for mental health services not included in the Medicare Benefits Schedule. If you’re looking for mental health support or rehab outside the hospital walls, Private Health Insurance might just be your new best friend (just check with your insurer for the deets). 

Transparency about out-of-pocket costs 

The Australian Government Medical Costs Finder is an initiative that provides information on what you can expect to pay for specialist medical services. It’s based on the most recent publicly available data, and it’s a handy tool to help you assess what you need from Private Health Insurance. 

Are further reforms needed? 

Private Health Insurance membership in Australia has held steady or increased slightly over the past few years, with around 45% of the population holding Hospital Cover and around 55% holding extras cover as of September 2023.1APRA – Quarterly private health insurance statistics  But that doesn’t mean there aren’t any issues under the hood. The president of the Australian Medical Association (AMA), Professor Steve Robson, has called for some changes to make sure Aussies are getting bang for their buck and to keep the whole system functioning well. 

The AMA is gunning for the government to bring back the Private Health Insurance Rebate for specific groups.  They also want changes to the Lifetime Health Cover loading and penalties, making it easier for Aussies to stick with Private Health Insurance for the long haul.  

Where can I find and compare Health Insurance?

Health Insurance can be a real head scratcher. But at iSelect, we’re all about keeping things easy. You can cut through the confusion by checking out Health Policies online. Or if you’re more of a chat on the phone kind of person, dial us up at 1800 784 772, and our friendly crew of comparison experts are ready to guide you through to the appropriate Health Insurance for you. 

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