The most wide-ranging reforms to health insurance in the last two decades have been introduced by the federal government, with most changes due to come into effect from April 2019.
Gold, Silver, Bronze and Basic product tiers are being sold as a solution that will make health insurance simpler, but the reality is far from that.
Gold, Silver, Bronze and Basic should, in theory, make choosing a policy simpler, however the proposed product tiers are not four options. Insurers can label their products as ‘Plus’, creating seven categories, and then there are literally billions of versions of potential policies.
The set-up of these categories plays into the hands of insurers who now have the means to better market their products, while consumer confusion remains unaddressed.
Previously there were around 12 categories of often-excluded treatments, now there are 38 categories. And the definitions of these treatments aren’t always easy to understand. For example:
Chemotherapy is covered in Bronze policies, but cancer surgery cover depends on which clinical category it falls under. For example, lung cancer surgery would only be covered by Silver and Gold policies.
Eye is covered in Bronze policies – but that includes only part of the services needed for your eye. If you need an eyelid procedure, that’s plastic and reconstructive surgery covered under Silver policies and if you have a cataract you’ll need a Gold policy to be covered.
Podiatric surgery is listed as covered for a Silver policy, but this cover only relates to the hospital accommodation and any necessary prostheses, while the surgery itself still isn’t covered
But wait, there’s more
Insurers can also offer Basic Plus, Bronze Plus and Silver Plus policies.
These policies cover additional treatments available in a higher category, so for example:
- Silver Plus could contain cover for all Silver treatments and pregnancy.
- Bronze Plus could contain all Bronze treatments plus heart surgery.
The federal government has created a factsheet to explain what treatments are included in Gold, Silver, Bronze and Basic policies.
But it doesn’t address the confusion surrounding categories, or explain what’s included in any ‘Plus’ policies.
Changes to your cover
If you’re shifted from your current policy to a new one you may end up with less cover. For example:
- Budget cover policies currently include all cancer surgery – the new Bronze cover policies include only some cancer surgeries.
- Medium cover policies currently have full cover for rehabilitation, palliative care and psychiatric treatment in private hospital – the new Silver policies only offer restricted cover in public hospital for these treatments.
- Only expensive Gold and perhaps some Silver Plus policies include cover for pregnancy and birth.
What if I already have health insurance?
There’s a transition period from 1 April 2019 to 1 April 2020. If you already have a policy it may stay in its old format until 1 April 2020 so very little will change for you. From 1 April 2020, everyone will need to have a policy in the new system.
It’s not yet known when insurers will convert old policies into the new system, or whether they will close old policies and move you to a new one.
Australians with private health will need to make sure that if they’re being moved to a new policy, they know what they’ll be covered for and whether there will be any changes on their existing policy.
What will Gold, Silver, Bronze and Basic policies cover?
New policies will be classified according to the level of cover they provide.
Policies cover up to 38 categories of treatments and there are standardised definitions for procedures in each category which will be adopted by all insurers.
Basic policies will provide very little if any cover in private hospital.
Note: The government has not addressed junk health insurance policies. These policies – now also classified as ‘Basic’ – only cover a handful of procedures and do not provide cover for stroke, cancer surgery, heart disease, flu, asthma and thousands of other therapies available in hospital.
Bronze policies will cover 18 categories of services in private hospital including:
- breast, skin and prostate cancer
- broken bones
- joint reconstruction
- ear, nose and throat surgery
- diabetes management in hospital
Silver policies will cover 26 categories of services in private hospital, including:
- everything covered by Basic and Bronze
- heart surgery
- lung cancer surgery
- medically necessary plastic and reconstructive surgery
- bone marrow transplants
- investigation and treatment for back, neck and spine problems such as for sciatica and scoliosis
Gold policies will cover 38 categories of services in private hospital, including:
- everything covered by Basic, Bronze and Silver
- pregnancy and birth (see Do you need insurance to have a baby?)
- joint replacements
- gastric banding
- hospital psychiatry services
- palliative care
What else will change?
In return for a cheaper premium, you’ll be able to choose a policy with a larger excess.
Excess caps for policies that provide an exemption from the Medicare levy surcharge will be increased from $500 to $750 for singles and from $1000 to $1500 for couples/families.
While lower premiums are a welcome relief for your household budget, consider whether you can afford a $750 excess if you need to go to hospital, especially if that comes on top of thousands of dollars of out-of-pocket costs if your surgeon charges more than the recommended fee.
For every year you’re under the age of 30, insurers may offer a discount of two percent on your premium. So a 29-year-old can get a discount of up to two percent, a 28-year-old four percent and so on, up to a maximum of 10% for 18- to 25-year-olds. If you stay on the same policy you can keep the full discount till you’re 40.
But there’s no guarantee your insurer will offer a discount, and you can’t keep it if you switch – which may prevent you from getting a better deal or a policy that meets your changing needs.
Young people usually get very little value from private health insurance – take our quick quiz to see if you need health insurance.
Alternative therapies not backed by medical evidence such as naturopathy and homeopathy will no longer be covered by extras policies.
Cover for acupuncture and massage stays in place.
If you live in rural or regional Australia, your hospital policy may subsidise travel and accommodation costs if you need to travel to access treatment.
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