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What the private health insurance changes will mean for your family

Changes to private health insurance australiaOn April 1 this year private health insurance will change forever. It’s really important that you understand exactly how your family’s policy may change and are confident that you still have the right level of cover for your family, at the right price.

Private health insurance can be confusing at the best of times so we’ve saved you headache by breaking down exactly what you need to know about the upcoming changes.

First of all, if you have private health insurance you’re probably aware that your premiums are set to increase again on April 1 – this year by an average of 3.25%. But remember 3.25% is an average only – some policies will increase by much more than this.

According to private health insurance experts at iSelect, the average price for family policy in 2018 was $4,181 (this is without any government rebate applied). So a 3.25% increase on a $4,181 policy means on average families will be paying almost a $135 more a year for their cover.

While prices are set to rise, new government changes to private health insurance will also be introduced this year in an effort to make private health more affordable and easier to understand.

What are the private health insurance changes?

Gold/Silver/Bronze/Basic

The biggest change to private health insurance is the introduction of the Gold/Silver/Bronze/Basic product tiers to all hospital polices. This will help make it easier for customers to compare hospital products.

Under the new system there are minimum standards for hospital services and treatments to be covered under each tier and all policies within a tier must meet a minimum standards.

This means all products in the same product tier will cover the same services and treatments as all other policies in that tier. So for example, currently insurers can use any term they wish relating to the birth of a child i.e. obstetrics, birth related services, pregnancy. This makes it confusing to understand the difference. The new health reforms will have one set category the fund must use for each benefit which will be ‘Pregnancy and Birth’.

Increased excess to lower premiums

In an effort to make private health insurance more affordable, you now have the option to increase your excess in exchange for lower premiums (the amount you pay each month).

Excess on a policy is the amount you agree to pay towards the cost of hospital treatment, in exchange for lower premiums. This new change will mean that the maximum excess for families can be increased from $1,000 to $1,500. Opting for the higher excess will save families up to $350 a year on their premiums.

It will be at the discretion of the each insurer which policies they offer the $1,500 excess on. If you’re interested, it’s best to speak to a health insurance expert like iSelect to help you understand whether the higher excess is available on your policy. If it’s not, it may be worth switching policies to become eligible.

Most natural therapies no longer covered

Most (but not all) natural therapies will no longer be covered under extras policy from April 1. However, some popular treatments still remain including remedial massage, Chinese medicine and acupuncture.

This change will mean that you can no longer receive a rebate from your private health fund toward any other natural therapies such as naturopathy, yoga, homeopathy, tai chi and reflexology. Pilates will also no longer be covered unless it’s provided by a registered physiotherapist under your physiotherapy limits (although this may vary between funds).

Improved benefits for regional customers

Families living in rural and regional areas will the ability access improved travel and accommodation benefits if they need to travel to the city for treatment.

Currently around half of all insurers offer travel and accommodation benefits for members who need to travel for treatment but they’re generally only included in top level extras policies.

It is up to the insurer as to whether or not they will provide travel and accommodation benefits so if you live in a rural or regional area it’s important to check whether it’s included on your policy and if not, it may be time to switch.

Discounts for under 30s

Policy holders who are under 30 may be eligible to receive a 10% discount off their hospital cover – this could save you hundreds of dollars a year off your family policy.

The discount will mean that you’ll get 2% off a year for each year you were under 30 when you first purchased hospital cover up to a maximum discount of 10%. The discount will stay in place until you turn 40 (as long as you stay on the same policy) and will then begin to phase out.

Keep in mind that the youth discount won’t be available on all policies – again it will be up to the insurer to decide which of their policies they offer the youth discount on. But if you are a young parent, it’s definitely worth seeing if you are eligible for a discounted policy.

So, what do I need to do?

Now that you have the facts on how private health insurance is changing, it’s more important than ever to check your policy before April 1 to make sure you’re still getting value for money.

If you’re feeling confused or just simply don’t have the time, a private health insurance comparison service like iSelect can do the hard work for you. Their highly trained advisers can cut through the confusion, explain how your policy is changing and compare it to other options to make sure you are still on the right level of cover from April onwards.

– written by Jessie Petterd, iSelect spokeswoman

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This blog post is sponsored by iSelect

At iSelect, we’re passionate about helping Australians reduce their household bills and save money, time and effort. We are Australia’s go-to destination for comparison across insurance, utilities and personal finance products and our advice is provided at no cost to the customer.

We compare a wide range of Australia’s leading brands but unlike other comparison sites, we are not owned by an insurance company. Our highly trained expert consultants help Australians select the right product, at the right price. Visit iselect.com.au

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