You may have heard by now that private health insurance is about to change big time. But what exactly are the changes and how will it affect you and your family?
On April 1 this year private health insurance will receive its biggest shake-up in over a decade and as a result, your policy is likely to change. So it’s really important to understand exactly how your family’s policy is changing and make sure you still have the right level of cover, at the right price.
In addition to health premiums rising on average by 3.25 percent from April 1, the Federal Government has introduced a series of new changes to private health insurance which are set to make it more affordable and easier to understand.
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What do I need to know?
Gold/silver/bronze/basic product tiers
There’s actually a lot that is changing from April 1. The biggest change that will impact everyone with health insurance will be the introduction of the gold/silver/bronze/basic product tiers for hospital cover.
The introduction of new product tiers aims to make it easier to understand your policy and to compare against others in the market. The new system sets minimum standards for hospital services and treatments to be covered under each tier and all policies within a tier must meet that minimum standard.
This means all products in the same product tier will cover the same services and treatments as all other policies in that tier. To put that into perspective, currently, insurers can use any term they wish relating to the birth of a child i.e. obstetrics, birth-related services, pregnancy. This makes it confusing to understand the difference. The new health reforms will have one set category the fund must use for each benefit which will be ‘Pregnancy and Birth’.
Increased excess in exchange for cheaper premiums
The new changes will now mean that you have the ability to increase your maximum excess in exchange for a lower overall premium, reducing the amount you pay each month. For a family policy, the maximum excess will be increased from $1,000 to $1,500.
Keep in mind that it will be up to each insurer which policies they offer the $1,500 excess on. If you’re interested, it’s best to speak to a health insurance expert to help you understand whether the higher excess is available on your policy. If it’s not, it may be worth switching policies to receive the cheaper premium.
Removal of most natural therapies
The new changes will mean that unfortunately some (but not all) natural therapies will no longer be covered under extras policies. The natural therapies that will remain within extras policies include remedial massage, Chinese medicine, myotherapy and acupuncture.
However, you’ll no longer receive a rebate from your private health fund toward any other natural therapies such as naturopathy, yoga, homoeopathy, tai chi and reflexology. Pilates will also no longer be covered unless it’s provided by a registered physiotherapist under your physiotherapy limits (check this with your fund as it will vary).
Improved benefits for regional customers
If you and your family live in a rural or regional area of Australia, you’ll now have the ability to access improved travel and accommodation benefits if you need to travel to the city for treatment.
Again, it will be up to the insurer as to whether or not they will provide travel and accommodation benefits. So if you live in a rural or regional area, it’s important to check whether it’s included in your policy; if not, it may be time to switch policies.
So, what do I need to do?
With all of these major changes rolling out from April 1 this year, it’s important to check that you and your family are still covered for what you need.
You don’t have to sort through the changes on your own though. There are health insurance comparison services like iSelect which can do the hard work for you. Their highly trained advisers can cut through the confusion, explain how your policy is changing and compare it to other options to make sure you are still on the right level of cover from April onwards.