Health insurance changes coming your way from April 1

Private health insurance members are set to be hit with significant increases from April 1. These are the changes that will impact you.

Health insurance members could end up paying more despite having a lower level of cover.

The industry sector is undergoing its biggest overhaul in decades and within the next 12 months all hospital cover must be classified into gold, silver, bronze or basic tiers.

The changes are making health insurance more confusing than ever before as funds have the option of adopting some reforms while others are mandatory and are also rolling out the changes at different times.

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But customers who want top cover but do not require insurance for costs such as pregnancy and birth services could end up paying more to do so.

For policies categorised as gold from April 1 members with this level of cover will be unable to remove pregnancy.

The government has mandated that all gold policies include unrestricted cover for 38 clinical categories including pregnancy and birth, IVF and weight-loss surgery.

Under Gold hospital cover members will automatically be covered for pregnancy and birth-related services.

This means older customers who don’t want pregnancy will need to opt for a silver or silver plus policy where it can be excluded.

But analysis by financial comparison website iSelect found while Silver Plus products should be cheaper, this is not always the case.

“A Silver Plus policy may be several hundreds of dollars a year cheaper than the same fund’s Gold hospital cover,” iSelect spokeswoman Laura Crowden said.

“However from April 1 there will be some Gold policies available at similar or a cheaper price than some Silver Plus policies.”

She said this could mean some customers would be better off taking out Gold cover and being covered for pregnancy, regardless of their age, to save on their premium.

A 69-year grandmother who did not want to be named said her fund, one of the nation’s largest, told her she would pay more if she dropped her top insurance to Silver Plus.

She labelled it “ludicrous.”

“I was told I would have to pay $4.60 above my Gold monthly premium to drop to Silver,” the grandmother said.

“Gold cover for me rises in April to $174.40 and if I drop to Silver Plus to exclude unwanted services I would pay $179.

“Being an aged pensioner it appears cheaper for me to pay for unrequited pregnancy services.”

Mother-of-two Veronica Finlay, 71, said she’s frustrated her top hospital policy includes cover for expenses including obstetrics, IVF and male reproductive services which she does not need.

“I can assure you that at my age I have no intention of becoming pregnant either naturally or by assisted means,” she said.

Mother-of-two Veronica Finlay, 71, is frustrated her hospital policy covers expenses including pregnancy and birth.

Mrs Finlay said her fund told her they were unable to remove cover for things such as pregnancy — she is paying $156.40 per month for her insurance.

Premiums rise by an average of 3.25 per cent on April 1 pushing up the average hospital and extras single cover by $63 to $2005.

For couples premium will rise by an average of $151 to $4805 and for families cover will rise by $135 to $4303.

No rebates are applied to these calculations.

Basic will cover people for rehabilitation, hospital psychiatric services and palliative care.

Bronze will have the added benefits of procedures for tonsils, (medically necessary) breast surgery and chemotherapy and radiotherapy.

Those on the silver level will also be able to access dental surgery and medically necessary plastic and reconstructive surgery, while those on the top level of cover — gold — will be covered for all the treatments covered in basic, bronze and silver, as well as pregnancy and birth services, weight-loss surgery and cataracts.

One of the nation’s largest fund’s HCF has notified all their members of changes coming to their policies and their spokesman Alan Brindell urged all members to contact their funds.

“These reforms provide a great opportunity for people to review their policies and to make sure they are getting the best cover to suit their needs,” he said.

“However it’s worth taking the time to review your policy, rather than rushing to make a change ahead of the rate rise.”

The nation’s largest insurer Medibank said it has begun notifying customers of the reform changes and will continue to do so over the coming 12 months.

All members’ cover will be reclassified into the different tiers during this time frame.

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Private health insurance reforms from April 1, 2019

• All hospital policies must be classified into gold, silver, bronze and basic cover by April 1, 2020.

• Insurers can offer additional coverage above the minimum requirements by providing basic plus, bronze plus or silver plus policies.

• People aged 18-29 can get discounts of up to 10 per cent. They will retain the discount until age 41. The discount is a two per cent discount for each year a person is aged under 30, up to a maximum of 10 per cent to 18 to 25 year olds.

• Funds have the option to provide people living in regional and rural areas travel and accommodation benefits as part of hospital cover.

• Ability to change excess cover: insurers can offer people an increase to their excess in return for a cheaper premium. This means jumping from $500 to $750 for singles and $1000 to $1500 for couples and families policies.

BY THE NUMBERS

• 11.2 million Australians (44.6 per cent) of the population have hospital cover.

• 13.5 million Australians (53.9 per cent) of the population have extras cover.

• Average out-of-pocket expense per hospital claim is $290.

• Average out-of-pocket expense per extras claim is $49.

Source: Australian Prudential Regulation Authority, 2019 statistics.