Simplified private health insurance rules are coming

New rules covering private health insurance must be introduced by insurers before April next year to give patients a clearer understanding of their cover.
 
The laws introduce simple clinical categories – such as back, neck and spine or assisted reproductive services – which are linked to Medicare Benefits Schedule (MBS) item numbers. The changes also require insurers to simplify their coverage into four tiers – Basic, Bronze, Silver and Gold – before April 2020.
 
The tiers are linked to clinical categories, meaning that a policy providing cover for a clinical category must cover all hospital treatments within the scope of that category.
 
Medibank senior executive Jonathan Spiers told newsGP the reforms would help customers be clearer about what they were covered for.
 
‘The reforms will help GPs give the best advice over whether to seek a public or private hospital for treatment,’ he said.
 
‘We want GPs to feel well informed and make clear decisions together with patients.’
 
‘We know that two thirds of non-emergency surgery takes place in the non-public sector, so that option is important for customers.’
 
Mr Spiers said the new clinical categories were very prescriptive in what they covered.
 
‘GPs are consumers of health insurance as well, so we want GPs to feel confident and understand what’s in their product. The nuance around products is really important.’
 
The changes came amid declining rates of private health insurance coverage, with complexity and difficulty of understanding the policies cited as a key issue in government consultations.
 
Around 55% of Australians have some form of private health cover. Last year, the number with hospital-only or combined health cover fell 0.9% to 45.1%, according to the Australian Competition and Consumer Commission.
 
The Department of Health claims the changes will particularly benefit women with breast cancer, with all medically necessary breast surgery included in Bronze tier cover and higher.

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