On 1 April, 2019, there will be significant chances to the way private hospital cover benefits are categorised in Australia. These changes are coming about as a result of government initiated private health insurance reforms. Government officials were concerned that it was challenging for consumers to understand the current system of categorising private health insurance products. People complained that they found it difficult to comprehend which healthcare services their insurance did or did not cover. The new system is intended to clarify for consumers the level of value they can expect to receive in exchange for the health insurance premiums they pay.

The government has mandated what minimum standards will be for the new gold, silver, bronze and basic product tiers that private health insurance providers will make available. This will simplify the shopping process for consumers when they compare private health insurance policies. It may also help them better plan their healthcare expenses as they make appointments with various healthcare practitioners in the future.

It is possible that transitioning to the new system may result in some changes to existing health insurance policies. However, private health insurers will be attempting to maintain existing cover for their customers through the use of categories that include basic plus [+], bronze plus [+] and silver plus [+]. The current categorisation system is also largely based on tiers, which means that many existing private health insurance policies will be totally or relatively unaffected as they migrate into the new product tiers.

1 April 2019 is not the final deadline for these changes to take effect. Insurers have until 1 April 2020 to be in compliance with the standards the government has set for the tiers on all health insurance products.

Changes to Women’s Health Insurance Policies Under the Reforms

When the reforms take effect, the bronze tier hospital cover policies will provide cover for gynaecology services and medically necessary breast surgeries. All tiers above bronze will also provide cover for these services.

New Protections for Consumers

The Private Health Insurance Ombudsman has been given improved resources for protecting consumers’ interests in the private healthcare marketplace. Investigating officers at the Private Health Insurance Ombudsman will soon have the capacity to audit or inspect the facilities of private health insurers for the purpose of better empowering them to authenticate the information health insurers provide to their customers.

These are some of the most important changes you need to be aware of in regards to the private health insurance reforms. For more details, we recommend that you take a look at the relevant fact sheet and amendments.