Major health insurance changes to hospital cover in 2019

Health insurance policies will get a major overhaul in 2019. Find out how your cover will be impacted and how you can save.

Health insurance members will have their hospital cover reclassified this year as part of one of the biggest shake-ups the industry has seen.

Many hospital policies will be simplified and classified into four categories — gold, silver, bronze and basic — from April 1 when annual premium price changes kick in.

Health insurer NIB’s head, Mark Fitzgibbon, said it would finally allow consumers “to compare apples with apples”.

“Under your policy if you are covered for eye surgery, it won’t matter what kind of surgery it is, minor or major, if it’s eye surgery it’s eye surgery,” he said.

MORE: Seven ways to get rich in 2019

MORE: How to cope with unexpected expenses that hit hard

Previously items falling under hospital cover, such as eye surgery, would be classified into subsections including minor and major surgery.

This made it confusing for members to understand what they would be covered for.

Hospital cover allows patients to choose their own doctor and decide if they want to be treated in a private or public hospital.

Latest Australian Prudential and Regulation Authority data shows that in the September quarter 11.2 million Australians had hospital cover — the equivalent of 44.9 per cent of the population.

Australians with private health insurance will be impacted by new changes to overhaul insurance policies in 2019.

Medibank chief customer officer David Koczkar said it would be contacting many customers to discuss changes to their cover and the impact.

“These new categories are the building blocks for hospital health cover, designed to drive consistency and transparency across the industry and make it easier to compare,” he said.

“Insurers will be able to offer additional coverage above the minimum requirements in basic plus, bronze plus and silver plus product tiers.”

Another change this year is the rollout of higher excess costs if customers choose them to allow their premiums to be reduced.

From April 1, singles can opt for a hospital cover excess up to $750 — previously it was $500. Families can choose excesses as high as $1500 — up from $1000.

Health comparison site iSelect’s analysis found singles could save up to $200 a year and families up to $350 a year. Spokeswoman Laura Crowden said the health system overhauls were designed “to make it easier for customers to compare policies”.

“The reforms should make private health insurance more affordable for many Australians but some customers may need to pay more for an increased level of cover to keep certain benefits,” she said.

“But in the short term it will be incredibly confusing for customers as their insurer may change the name of their policy or move them on to new policy with different inclusions and exclusions.”

Figures from iSelect show the average 2018 annual premium costs — with no rebate applied — was $3448 for families and $1925 for singles.

Younger Australians aged under 30 can get discounts from April 1 of up to 10 per cent off their cover.

@sophieelsworth

2019 HEALTH CHANGES

• Hospital cover will be classified into gold, silver, bronze and basic cover from April 1. Extras cover will not be reclassified.

• Minimum standards must be met for hospital cover to be reclassified.

• Funds have until April 1, 2020 to reclassify hospital cover.

• Policy costs will increase on average by 3.25 per cent from April 1.

• Customers can increase their excess charges further to lower premium costs from April 1.

• Australians aged 18-29 will receive policy discounts of up to 10 per cent on hospital cover.