Private health insurance set for shake-up

Lloyd Doyle
October 13, 2017

Young Australians who sign up to private health cover will benefit from discounts on their premium under sweeping Turnbull government reforms created to entice more young people into the system and slow the rising cost of health insurance.

For those under 30 who have never had private health insurance, a 2 per cent discount on their premium for every year before they turn 30, capped at a saving of 10 per cent, is on offer.

"The more young people you have in the system, the lower the average cost of premiums for everybody", he told ABC TV.

The changes will also cut off government rebates for a range of homeopathic and so-called "natural" therapies, including reiki, reflexology, yoga and Pilates.

"Given the cost burdens and modest wages many young people have, it would seem likely that this measure is only likely to be taken up by a minority of young adults who have the means, with the result that the two-tiered health system emerging in Australia is entrenched at an even earlier time of life".

Mr Hunt believes a discount for young people will encourage them to take up private health insurance while helping other policyholders.

Prime Minister Malcolm Turnbull says the package of measures will benefit all Australians and make comparing policies easier.

The changes will allow some people to increase their excess in exchange for lower premiums - up to $750 for singles and $1500 for families.

The government also said it had "struck an agreement" with the manufacturers of pacemakers and prosthetic hips and knees to reduce prices.

Premiums have increased an average of 5.6 per cent a year since 2010, but the minister wouldn't put a figure on how much that could fall. Private health insurers had agreed in writing to pass that saving on in full, Hunt said.

They will now be categorised into four levels of cover, Gold, Silver, Bronze and Basic, which is created to make it easier to work out which product is right for you. By the age of 40, people could be paying an extra 20 per cent in premiums if they decide to take out cover! Aromatherapy, herbalism, kinesiology, shiatsu and tai chi are also reportedly on the list.

"A community rated health insurance system works best when you have broad participation across all age groups, not just older or less healthy people".

Customers will be able to upgrade to plans that cover mental health with "no waiting periods", and basic private policies will include mental health cover as standard.

Labor's shadow health minister, Catherine King, suggested savings could amount to as little as 70c a week for young people and leave vulnerable people with higher out-of-pocket costs when they make claims.

These are low-priced policies that do not cover many treatment for many illnesses.

Australian Medical Association president Michael Gannon says the move won't solve the issue of affordability, but it is a step in the right direction.

Private Health Insurance Ombudsman powers will be boosted to ensure consumer complaints are resolved clearly and quickly.

Labor, however, welcomes the cut to the cost of devices on the prostheses list.

"Eighty-four per cent of Australians with private health insurance value the product and want to keep it, however their main concern is affordability".

'We need serious reform which addresses the simple fact that [healthcare] costs will continue to increase year on year'.

Other reports by Iphone Fresh

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