Health fund changes mean you may need to pay more for cover

More than six million Australians are at risk of losing critical health fund benefits when sweeping health reforms take effect in April, new analysis shows.

More than six million Australians are at risk of losing critical health fund benefits when sweeping health reforms take effect in April, new analysis shows. From April 1 all health fund policies will have to be divided into Gold, Silver, Bronze and Basic categories.

The government has set new rules outlining which medical procedures must be covered at a minimum for each of these levels of cover.

Health funds will be able to provide cover above the minimum level by offering Bronze “plus” and Silver “plus” insurance.

For example, a person with Silver cover might be able to add hip replacements and cataract surgery to their policy — procedures that won’t have to be covered in any category other than Gold.

Health funds are yet to explain to their members how their policies will be affected and how much more it could cost them.

A comprehensive analysis of the changes by health fund broker iSelect has identified a series of “pain points” health fund members need to be aware of to make sure they still have the right cover.

Pain points in the new health fund system identified. Picture Paul Miller AAP

“Some customers may be forced to upgrade to a higher level of cover to ensure their specific health needs are met. This is likely to be more expensive which is why it’s so important to shop around to get the best deal,” said iSelect spokeswoman Laura Crowden.

“Gold” policies will offer the most comprehensive level of cover and provide rebates for 38 treatment types.

“Silver” policies will cover 29 treatment types including heart and vascular care, lung and chest treatments, blood treatments, back, neck and spine, plastic and reconstructive surgery, dental, podiatry surgery and the implantation of hearing devices.

“Bronze” policies will cover only 21 treatment types including chemotherapy, radiotherapy, immunotherapy, pain management, skin, ear, nose and throat.

Only “Gold” policies will be required to cover cataracts, joint replacements, dialysis, pregnancy and birth, IVF, weight loss surgery, insulin pumps, pain management with a device or sleep studies.

Broker iselect says many insurers currently offer top policies without pregnancy, to suit older customers who want the most comprehensive cover but don’t want to pay for pregnancy.

Their top cover policies could be downgraded to Silver status under the changes.

It is estimated over 1.1 million Australians have these types of policies and they could be caught out by the changes.

iSelect says these customers will now need to look for a Silver Plus policy but will have to make sure it covers hip and knee replacements, cataracts, dialysis, pain management and other services on an unrestricted basis if they want the same level of cover they have now.

Key procedures won’t have to be covered in budget levels of health cover. AAP Image/Stefan Postles.

The bulk of Australians (five million people) are covered by budget health fund policies likely to be similar to the new Bronze level of cover.

Many treatments like spinal fusion, cochlear implants, insulin pumps and sleep studies were previously covered under most budget policies but will not have to be covered by the new Bronze policies, Ms Crowden said.

Health Minister Greg Hunt says the reforms will make private health insurance easier to understand and give consumers transparency for the first time on what was covered.

“From 1 April 2019 the Gold, Silver, Bronze and Basic classification system categorises existing and new private health insurance policies into easy to understand and easy to compare tiers based on the level of coverage provided,” a spokeswoman for Mr Hunt said.

“The policy categories set out a minimum set of services to be classed under a particular category. Insurers will continue to offer a range of services and coverage across policies and categories above the minimum thresholds,” she said.

Originally published as Health fund changes mean you may need to pay more for cover