How Private Health Insurance Reforms Will Affect Mental Health Benefits

Mental health is an important issue that affects the lives of many Australians, directly or indirectly. It doesn’t matter who you are or where you live, mental illness can have a huge impact on your life if treatment isn’t available when required.

On 1 April 2018, the government introduced a set of reforms to help Australians suffering from mental illness¹. These reforms are designed to improve patient access to mental health services, and encourage more people to seek help.

What do the changes to mental health benefits involve?

Under the new rules, you’ll now be able to upgrade your cover to access higher benefits for in-hospital treatment, without serving a waiting period. You can only use this exemption from the existing two month waiting period once.

As part of the reforms, the number of mental health treatments you can receive has also been removed¹. The limits that were in place typically applied to day programs, electroconvulsive therapy, and transcranial magnetic stimulation.

It’s hoped that by removing limits, patients will receive an improved level of care and be more inclined to take out private health insurance.

Who will benefit from the reforms to mental health?

When it comes to treating mental illness, it’s important to recognise the warning signs and seek immediate help². Mental illness can affect you at any time in your life, so being able to access treatment when required is essential.

If you suffer from mental illness you’ll now be able upgrade your cover and immediately access in-hospital mental health services if you are transferring from a policy that had minimum benefits. This will enable younger Australians who are often on lower levels of cover to get help as soon as they need it.

Why are the changes to mental health important?

The changes to mental health are important because mental illness is a major issue, with an estimated one in five Australians experiencing mental illness at some time in their lives². Mental illness can come and go throughout your life, so ongoing care is often required.

Removing limits on the number of mental health treatments you can access will improve the level of care you receive. The waiting period exemption will also make it easier for you to access care when you most need it. In most cases, you’ll need to pay a higher premium to upgrade onto a higher level of cover, however the additional expense can be far more favorable than paying for private treatment without private cover.

What impact will the reforms have on private health insurance?

Mental illness is a complex issue that requires the right level of treatment and support². If it is left untreated for too long, it can cause a great deal of suffering to those experiencing mental illness, as well as their families and friends.

Private mental health services are highly valued and play a pivotal role in helping people deal with mental illness. It is hoped that by removing treatment limits and waiting periods, it will encourage more Australians to seek help for mental illness, and increase the number of people taking out cover.

What other changes are taking place?

Under the new private health insurance reforms, insurers will be able to offer premium discounts on hospital cover of two percent for each year for people under 30. The discount will remain in place until that person turns 41 and will then gradually phase out³. The discounts are designed to make private health insurance more affordable for younger Australians, and encourage them to take out cover.

Although the provision of discounted products by insurers will be voluntary, if an insurer does decide to offer discounts, they must offer that discount to all eligible holders of that product, including new and existing policy holders.

To ensure your complaints are resolved as quickly and efficiently as possible, the Private Health Insurance Ombudsman will also be given more power and resources⁴. They will now be able to conduct inspections and audits of private health insurers to ensure your rights are protected.

How can I find out more about the changes to mental health benefits?

If you suffer from mental illness, the new private health reforms will provide you with clearer information, so you can compare hospital treatment products and shop around for a better deal.

As part of the reforms, private health insurance companies will also be encouraged to provide you with a single page of information that outlines the details of each of their products, and exactly what you’re covered for⁵.

If you’re confused about how the private health insurance reforms will affect mental health benefits, or need advice on selecting the right private health insurance policy to suit your needs, feel free to call us on 13 19 20.

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Sources:
1. http://www.health.gov.au/internet/main/publishing.nsf/Content/private-health-insurance-reforms-fact-sheet-supporting-mental-health
2.http://www.health.gov.au/internet/main/publishing.nsf/Content/F602B63256E116BBCA257BF00020AACF/$File/whatmen2.pdf
3. http://www.health.gov.au/internet/main/publishing.nsf/Content/private-health-insurance-reforms-fact-sheet-discounts-for-18-to-29-year-olds
4. http://www.health.gov.au/internet/main/publishing.nsf/Content/private-health-insurance-reforms-fact-sheet-summary
5. http://www.health.gov.au/internet/main/publishing.nsf/Content/private-health-insurance-reforms-fact-sheet-information-provision