Private health insurance reforms – what are the changes and how will they affect you?

If you have private health insurance, or are considering getting it, you should be aware of a series of changes that have come into effect on April 1 2019. 

These include the annual premium increase, a small decrease in rebates, the introduction of a new tiered system designed to simplify things for consumers, and other optional changes.

The New Tiered System

All private hospital cover will be classified as Gold, Silver, Bronze or Basic. What is, and is not, covered in these tiers will be based on new minimum standard of 38 clinical categories (see images that follow). Health insurers have until April 2020 to introduce this reform.

Image Source: The Conversation

Treatments & Tiers that may affect you:
  • Joint re-constructions –Bronze, Silver and Gold Tiers
    Such as knee or shoulder re-constructions including torn tendons, rotator cuff tears, damaged ligaments
  • Joint Replacements – only covered in Gold Tier
    Hospital treatment for joint replacement surgery, including revisions, resurfacing, partial replacements and removal of prostheses. Such as replacement of shoulder, wrist, finger, hip, knee, ankle, or toe joint and spinal disc replacement
  • Bone, Joint & Muscle – Bronze, Silver and Gold Tiers
    Hospital treatment for the investigation and treatment of diseases, disorders and injuries of the musculoskeletal system including carpal tunnel, fractures, hand surgery, joint fusion, bone spurs, osteomyelitis, bone cancer
  • Back, Neck & Spine – Silver and Gold category
    Hospital treatment for the investigation and treatment of the back, neck and spinal column, including spinal fusion and sciatica, prolapsed or herniated disc, spine curvature disorders such as scoliosis, kyphosis and lordosis
  • Pain ManagementBronze, Silver and Gold category
    Hospital treatment for pain management that does not require the insertion or surgical management of a device, including management of back pain.
  • Pain Management with devices – only covered in gold category
    Hospital treatment for the implantation, replacement or other surgical management of a device required for the treatment of pain. For example: treatment of nerve pain, back pain, and pain caused by coronary heart disease with a device (for example an infusion pump or neurostimulator)

For a more detailed look at Tier inclusions see the table below.

Source: Department of Health – Hospital Treatments by Clinical Category

To learn more about the categories inclusions in each Tier click here. 

Other Optional Changes for Private Health Insurers

Rural & regional assistance
People living in regional and rural areas can receive travel and accommodation benefits by insurers if they need to travel for special medical or hospital treatment. This will assist patients and their carers to meet the additional costs of having to travel to urban centres or capital cities to receive specialised treatment.

Cull on natural therapies
A range of natural therapies cannot be covered by insurers and will be removed, including homoeopathy, naturopathy, pilates, yoga, aromatherapy and Bowen therapy. A total of 16 natural therapies are excluded. A review undertaken by the National Health and Medical Research Council concluded there is no clear evidence of the efficacy of these therapies.

Higher excess exchanged for lower premium
People can increase their excess in exchange for a lower premium. The maximum excesses have been raised to $750 for singles (from $500) and $1500 for couples and family policies (from $1000).

Increased consumer protection
The role of the private health insurance ombudsman will be expanded, giving the agency new powers and greater capabilities to address issues and complaints.

Tips to getting a new policy
If you want to get private health insurance or are considering changing your insurance:

  • First determine the tier of insurance you need
  • Use online comparison sites and Government sites. Use this link to get some advice. 
  • Decide what provides you the best value for money for your needs
  • Review regularly, it could save you a lot of money

For further information refer to the sources below.


Sources & Further Reading

Department of Health: Private health insurance reformsGold, Silver, Bronze, Basic product tiers – fact sheet

Australian Government:

Consumer Health Forum of Australia – A consumers’ guide to the private health insurance changes


The Conversation: Premiums up, rebates down, and a new tiered system – what the private health insurance changes mean