A Breakdown of Some of the Major Changes of the Health Insurance Reforms

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HIF Australia

Late last year, the government announced changes to the private health insurance industry in Australia. The goal was to make health cover more affordable, relatable and accessible to everyday Australians who may think that health insurance is not that easy to get. The changes, which will be rolled out gradually between now and February 2020, are mapped out in a 22-page document – not the most digestible format for everyday Australians! So what are some of the major health reform changes and how might they affect you?

A simplified tiered system

This one is planned to come into effect in 2019. Essentially, new three and four-tiered systems are going to be introduced, where policies fall under one of three or four categories. For hospital cover it will be Gold, Silver, Bronze or Basic. For extras policies it will just be Gold, Silver or Bronze.

The purpose: To make it easier for everyday Australians to identify, compare, research and take out health insurance. The easily identifiable categories are designed to make policies more understandable.


18-29 year olds may be offered discounts and incentives for taking out health insurance early. This is opposed to the current Medicare Levy Surcharge that penalises those over the age of 31 for taking out health insurance too late. Instead, you’ll be able to receive a 2% discount on your policy for every year that you have insurance (capped at 10%). This lasts until the age of 40.

The purpose: To encourage younger Aussies to take out health insurance. The more people who have private health insurance, the more strain is take off the public system, which is a win for all Aussies.

Mental health access

Those on low-tier policies who have limited access to mental health cover are being given the option of having their waiting periods waived if they want to upgrade their policy to access mental health services. This reform, which is coming into effect on 1 April this year, aims to allow people to get access to in-hospital mental health services when they need it. However, you can only waive the two-month waiting period once.

The purpose: To provide more accessible in-hospital mental health care to those in need.

Improved care for those in regional areas

Hospital policies may now be offering travel and accommodation benefits to policyholders in regional areas, as opposed to the previous system that had these benefits included within extras policies. While it won’t be mandatory for funds to include these benefits in this way, they do have the option.

The purpose: Those living in regional Australia will be able to receive better value for money when they take out a hospital policy, and hopefully will find the health care they need more accessible.

Changes to Prosthesis List benefits

The government is actually hoping to lower the minimum benefit repayable for most of the items named on the Prosthesis List. The first change came into effect on 1 February this year, with subsequent changes occurring in 2019 and 2020 as well.

The purpose: The government is hoping that these changes to benefits paid out will save them over $1 billion, to be redistributed into other valuable areas.

Hopefully this has cleared up some of the confusion surrounding the health insurance reforms. If you’re interested in learning more, you can always read the full version here

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