Changes to private health insurance

From 1 April 2019, the Australian Government will introduce new rules to help make private health insurance simpler, and make it easier for people to choose the cover that best suits them.

Gold, Silver, Bronze and Basic hospital cover

Four new tiers of hospital cover will begin rolling out from early 2019 and will become mandatory from 1 April 2020. All hospital insurance policies will be classified as Gold, Silver, Bronze or Basic. 

Private health insurers have one year, from 1 April 2019, to introduce these new tiers. If you have an existing health insurance policy, your policy will change to fit into one of the new tiers between now and 1 April 2020. Insurers will send you personalised information about how these changes affect your policy, look out for this information.

What is, and is not, covered in these tiers will be based on new minimum standard categories of treatment. These standard categories are simply groups of what hospital treatments are, and are not, covered under each policy. Each standard category—for example, ‘bone, joint and muscle’ category, or ‘heart and vascular system’ category—sets out the hospital treatments that must be covered by your private health insurer. If a policy covers a certain category, then it must cover everything listed in it—not only some things.

To ensure they comply with these new tiers, private health insurers will need to place current policies into one of these tiers—Gold, Silver, Bronze or Basic. Your insurer will tell you where your policy has been placed, and whether any changes have been made to policies to align with the new tiers. 

If you are happy with where your policy has been placed, you do not have to change it. If you want more, or less, hospital cover you can talk to your private health insurer about changing cover.

Insurers will continue to be able to offer additional coverage above the minimum requirements in Basic Plus (+), Bronze Plus (+) and Silver Plus (+) tiers.

See Product tiers and clinical categories for more information.

Private Health Information Statement (PHIS)

Your insurer is required to send you a statement summarising what your policy covers and does not cover at least once a year, and again each time your policy changes.

From 2019 onwards, policy information for new Gold, Silver, Bronze or Basic hospitals and new general treatment policies will be sent to you in the form of a Private Health Information Statement (PHIS) including information about what is, and is not, covered based on the new tiers and clinical categories of treatment. From 1 April 2020, all policies will be summarised in the PHIS documents.

You will be able to search for and compare a standard PHIS from every insurer in Australia on privatehealth.gov.au. Insurers can also offer a customised PHIS for their members and in their emails, letters and websites, which may include further information. 

Mental health treatment waiting periods

Since 1 April 2018, health insurers have been providing greater access to mental health services by allowing people to upgrade their hospital cover without serving the usual two month waiting period for in-hospital psychiatric treatment. Policyholders are able to use this exemption from the usual waiting period on a once-off basis.

See Waiting periods to find out more.

Natural therapies

From 1 April 2019 private health insurers will no longer be able to offer benefits for some natural therapies as part of a health insurance policy.

The affected natural therapies are Alexander technique, aromatherapy, Bowen therapy, Buteyko, Feldenkrais, western herbalism, homeopathy, iridology, kinesiology, naturopathy, Pilates, reflexology, Rolfing, shiatsu, tai chi, and yoga.

A review of natural therapies chaired by the former Commonwealth Chief Medical Officer found there is no clear, scientific evidence that these natural therapies are effective.

Discontinued policies 

If an insurer plans to discontinue your policy and move you to a new policy, they must provide you with clear and transparent information about how this change will affect you.

This information will better enable you to decide whether to transfer to the alternative product chosen by your insurer, or to purchase a different product, or transfer to a different insurer.

Ability to change excess levels

Eight out of 10 people with hospital cover already choose products with excesses. These excesses have been set at a maximum of $500 for singles or $1,000 for couples and families in order to avoid the Medicare Levy Surcharge

Under the new changes, insurers have the option to allow people to increase their excess in exchange for a lower premium - if they choose to do so.

The maximum excesses are now being raised to $750 for singles and $1,500 for couples and family policies.

Discounts for 18 to 29 year olds

From 1 April 2019, insurers will have the option to offer people aged 18–29 years discounts of up to 10 per cent of their private health insurance hospital premiums. People will retain that discount until they turn 41, when it will be gradually phased out.

The allowable discount will be two per cent for each year that a person is aged under 30, to a maximum of 10 per cent for 18 to 25 year olds.

If a policy offers age-based discounts they will be available to both new and existing policy holders.

Your insurer will tell you if, and how, they will apply this change.

Travel and accommodation benefits for rural consumers

People living in regional and rural areas sometimes need to travel away from home for specialist medical and hospital treatment.

Insurers will have the option to offer travel and accommodation benefits as part of hospital cover. Some insurers already offer these benefits to their members under general treatment or extras cover.

Talk to your insurer to find out more.