Private Health Insurance Changes – Does Your Family Still Have the Right Cover?
Private health insurance is not the most exciting topic to bring up at BBQs on the weekend. But I’ve noticed that over the past few years as friends have started families, more friends are sidling up to me to privately ask my advice on health insurance. Whether they’re looking to get pregnant or have just had their first child, many friends are confused about what to do about private health insurance.
I’ve always had private cover but when I came off my parent’s policy in my mid-20s, I took out a pretty basic level of cover designed to avoid paying extra tax. But since becoming a mum last year, I revaluated my level of cover and upgraded to a policy better suited for a young family.
Big changes happening in 2019
Lately my friends have been asking me ‘Gold, Silver, Bronze – what’s that all about?’ It seems lots of people are vaguely aware of changes happening to private health insurance but aren’t exactly sure what they mean for their family.
The good news for families is that the government is introducing a number of reforms designed to make private health insurance easier to understand and hopefully more affordable.
Unfortunately in the short term many customers are likely to be even more confused as there may be changes to what their policy does and does not cover.
What do I need to know?
Private health insurance is really confusing. I talk about private health insurance for a living but I’m the first to admit that sometimes even I get confused. To help make it easier, here is a quick run-down of the key changes happening from April 1.
Premiums are going up
Premiums will rise by an average of 3.25% on April 1 and have gone up by 26% on average over the past five years. This year’s average increase works out to an extra $135 a year on the average family policy. But remember some policies will go up by more than 3.25% and others less, which is why it’s always a good idea to compare your policy against other options.
Insurers will be required to categorise 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. This should make it much easier to compare policies and choose the right policy for your family’s needs and budget.
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 & myotherapy will still be covered under extras.
Increase your excess to lower your premiums
From April 1, you can choose to increase your maximum excess in exchange for lower premiums (reducing the amount you pay each fortnight or month). By increasing your excess from $1000 to $1500, you could save up to $350 a year on a family policy. But the higher excess won’t be offered on all policies so if you are keen to bring down your premiums you might want to shop around.
Other reforms include improved travel and accommodation benefits for regional and rural customers who need to travel to the city for medical treatment and discounted premiums for under 30s.
Do I still have the right cover?
As a result of the reforms, some customers will be impacted by detrimental changes which means they will no longer be covered for things they were previously and may need to upgrade to a higher level of cover to keep certain benefits.
It’s really important that all policy holders take the time to carefully review their policy before April 1 and make sure they understand exactly how their policy is changing both in terms of price and level of cover.
Save time and hassle
Busy mum’s have better things to do with their time than spend hours comparing insurance policies. So you might want to consider speaking to a private health insurance expert like iSelect who can cut through the confusion and explain how your policy is changing. They can compare your current policies to other options and check whether you are still getting value for money.
Yes private health insurance is boring and yes it’s confusing (although hopefully a little less so from April 1). But the number one reason families have private health is for ‘peace of mind’. So with all the changes happening, take the time to check your policy and be confident your family still has the right level of cover.
Laura is the Corporate Affairs Manager at iSelect and is passionate about helping Aussie families reduce their household bills and expenses. Outside of work, she’s mum to a cheeky one year old boy and a disgruntled cat.