Medibank and NIB axe benefits under federal government’s Gold, Silver, Bronze reforms

Just weeks after announcing a premium rise, Medibank has written to its members warning they will lose key benefits under the government’s Gold, Silver, Bronze and Basic reforms.

Exclusive: Health funds have begun axing benefits from their members just weeks after announcing they would raise premiums by almost twice the inflation rate.

Up to half of all policy holders are receiving letters explaining their entitlements have changed as a result of the federal government’s Gold, Silver, Bronze and Basic health reforms — designed to simplify cover — which come into effect in April.

Some members will find themselves paying higher premiums which deliver less benefits.

Medibank this week emailed members with mid range corporate hospital products to warn they will axe benefits for 70 treatments including some weight loss and fertility treatments.

Benefits for another 64 in-hospital Psychiatry or Psychotherapy services will be restricted and members who claim for this care will face large out-of-pocket expenses.

Customers with extras cover will also lose benefits for 10 natural therapies from April 1 including Alexander technique, Aromatherapy, Bowen Therapy, Feldenkrais, Reflexology, Western Herbalism, homoeopathy, Shiatsu, Kinesiology and Naturopathy.

The cuts were part of the government’s reforms that would “make health insurance simpler to understand,” the fund says in an email to members.

Some health fund members will find themselves paying more for less.

NIB has told News Corp Australia it too will make cuts “as a result of the standard clinical definitions reform there will be some changes required to our hospital covers but we’ve worked hard to ensure that any changes to product benefits are focused on the best interests of our members to improve affordability while still providing genuine choice of cover.”

The NIB changes will apply from 1 July 2019, the spokesman said.

BUPA managing director Dwayne Crombie told News Corp Australia: “inevitably with the mandatory changes to remove a number of natural therapies previously covered by health insurers in Australia and also the changes to ‘clinical definitions’, there will be detrimental changes for some of our customers.”

“At the same time, some of our customers will benefit from having new items added to their policies.”

The benefit cuts are the first instalment of the pain many health fund members can expect from government reforms to simplify insurance into the four new categories.

“Anything which makes private health insurance more expensive or less value for money will continue the exodus from insurance and build up the stress on the public system to the detriment of patients on long waiting lists,” Australian Medical Association president Dr Tony Bartone said.

The benefit cuts are the first instalment of the pain many health fund members can expect from government reforms. Picture: Getty Images

Private Healthcare Australia chief Dr Rachel David said benefit changes will be widespread.

“One third to one half of health fund members will be receiving letters indicating some change. There will be inclusions as well as exclusions,” she said.

The cuts to natural therapies are the result of the government withdrawing the 25 per cent tax rebate for health cover from the therapies after the Chief Medical Officer found they had no proven clinical effectiveness.

Health Minister Greg Hunt has repeatedly insisted the reforms would not change people’s health cover.

“It is important to note that our new Gold, Silver, Bronze and Basic tiers and clinical categories do not change the existing cover for consumers,” a spokesman for Mr Hunt told News Corp Australia in September last year

“If a product currently covers particular clinical categories, then that product will be able to continue to offer that cover,” he said.

Health Minister Greg Hunt has insisted the reforms would not change people’s health cover. Picture: AAP

Dr David said under the reforms weight loss surgery and fertility service would only be available in Gold level policies.

The removal of these items from the cover and restrictions on in-hospital psychiatric care were made to keep the premium at or around the same price, she said.

“The Liberals designed these changes hand-in-hand with their private health insurance mates.

It’s now clear that the big insurers will use the Government’s changes as another excuse to downgrade cover, leaving many Australians worse off,” Opposition health spokeswoman Catherine King said.

“Instead of letting insurers set policy and increase premiums above inflation, Labor will take on the big insurers by capping premium increases at two per cent for two years and ordering a sweeping Productivity Commission review of the sector,” she said.