What the Private Health Insurance reforms mean for you

From February 2018, some of the Government initiated reforms to Private Health Insurance (PHI) will start to take effect.

Addressing affordability

In recent times we’ve seen costs in the healthcare sector rising year-on-year. Higher instances of chronic disease, more costly medical technologies, an aging population and a decreasing percentage of Government rebates have all added pressure to health insurance premiums, and contributed to concerns over the affordability of private cover

The Government’s latest reforms are designed to address the affordability of health cover in Australia. The reforms include reductions to the prostheses list benefits that private health insurers pay (e.g. for surgically implanted prostheses, human tissue items and other medical devices) that are estimated to deliver $188 million in savings to the PHI industry. Medibank has committed to pass on these savings in full to our customers.

Insurers will also be able to offer health cover options with a $750 excess that qualify for the Medicare Levy Surcharge exemption. Choosing a policy with a higher excess can have the effect of reducing your health cover premiums.

A system that’s easier to understand

The introduction of a new Gold, Silver, Bronze, Basic classification system is intended to make it easier to compare and choose private health insurance products.

The main comparison website, privatehealth.gov.au will also be upgraded to make at-a-glance comparisons easier. And the Government will be assembling a team of experts to set some guidelines around how out-of-pocket costs are communicated to patients.

Discounts for people aged 18-29

From April 2019, private health insurers will be able to offer discounts to 18-29 year-olds taking out their own hospital cover. A health insurance system works best when there’s participation from a broad range of age groups, so any measures encouraging young people to join are a good thing.

You can see a snapshot of the key reforms below.

Medibank have welcomed these reforms and is committed to working with the Government to address the issue of affordability of private health cover.

The Department of Health has the full list of reforms, as well as a handy fact sheet overview.