The Big Changes To Health Insurance Happening April 1

The health insurance industry is about to see its biggest shakeup in more than a decade.

As of April 1  premiums will rise an average of 3.25 percent. That will mean paying an extra $135 a year to the average family policy.

That’s nothing new, increases happen every year. In fact, over the past five years health insurance premiums have risen an eye-watering 26 percent, far in excess of inflation.

But this year the Federal Government is forcing a number of changes on the industry which have significant implications.

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Here’s a summary:

Premiums Going Up

  • Premiums will rise by an average of 3.25 percent on April 1 and have gone up by 26 percent on average over five years.
  • This works out to $135 a year more on the average family policy.
  • Some policies will go up more than 3.25  percent and others less.

Introduction Of Gold/Silver/Bronze/Basic Tiers For Hospital Policies

  • Insurers will be required to categories all hospital policies as either Gold, Silver, Bronze or Basic.
  • There will be minimum standards under each tier as to what services and treatments must be included.
  • It will make it easier for customers to understand and compare policies.

Most Natural Therapies No Longer Covered

  • Most (but not all) natural therapies will no longer be covered under extras policies including naturopathy, yoga, pilates and bowen therapy.
  • Only remedial massage, Chinese medicine, acupuncture and myotherapy will still be covered.

Increase Your Excess In Exchange For Lower Premiums

  • Customers now have the option to increase their maximum excess in exchange for lower premiums, reducing the amount you pay each fortnight/month.
  • Increasing the maximum excess from $1000 to $1500 could save families up to $350 a year.

Discounted Premiums For Under 30s

  • Policyholders aged under 30 are now eligible for discounts of up to 10  percent on hospital cover.
  • This could save younger Aussies aged 18-29 up to $200 a year on $2000 a year policy.

Improved Rural Benefits

  • Insurers will now be able to offer travel and accommodation benefits under hospital policies for customers living in rural and regional Australia who need to travel to the city for medical treatment.

“So what we'll see is simpler health insurance and more affordable health insurance,” Health Minister Greg Hunt said.

Choosing insurance will almost certainly be simpler but it’s doubtful many Australians will actually save money.

"A lot of people will see things that were previously covered under their health insurance now bumped up to the gold category,” Jonathan Brown, from consumer group Choice said.

For reasons such as this, a recent iSelect-Galaxy poll found more than a million Australians were rushing to change their cover before the April 1 changes.

Emily Anchesci and her son. IMAGE: Nick Etchells

Emily Anchesci decided to switch policies after having her second child and removed pregnancy from her policy.

“I saved close to $100 a month, or nearly $1200  a year,” she said.

The changes don’t come in until Monday, so there’s still time to change policy online.

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The role of the private health insurance ombudsman will be expanded, giving the agency new powers and greater capabilities to address issues and complaints.

If you’re planning on switching to a tiered policy, the level of coverage is summarised here

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