New rules announced by the government yesterday will make private health insurance easier to understand and help Australians choose the cover that best suits them and their families from 1 April 2019.

The rules establish easy to understand clinical categories and a Gold, Silver, Bronze and Basic classification system. This categorises existing policies into easy to understand tiers. Importantly consumers will not be forced to change their policy cover if they are happy with it.

This is a “no surprises” approach that will, for the first time, provide clearer information to consumers and allow them to compare different health insurance policies and choose the cover that best suits their needs, according to a statement issued by the Department of Health.

These reforms will have an overall neutral to -0.3% impact on premiums compared with current policy settings.

Now that the rules are in place, insurers can start implementing the new product tiers, says the Department.

New insurance policies will be categorised under this system from 1 April 2019, and by April 2020 all products must fully comply with the new arrangements.

Gold, Silver, Bronze and Basic

The Basic and Bronze cover levels are affordable options supporting choice for millions of Australians accessing key health services. Basic policies are especially valued by regional and rural patients.

Silver and Gold polices provide more comprehensive cover – providing peace of mind for services that are needed at different stages of life.

For Silver, Bronze and Basic, insurers can also offer additional cover to those listed as the minimum requirements, in which case the products may be named [Silver, Bronze, Basic] Plus (+).

Importantly, women will benefit from improved coverage including guaranteed cover for gynaecological services, ovarian and breast cancer treatment and breast reconstruction in Bronze tiers and above.

Insurers must also improve the information they provide to consumers. A new Private Health Information Statement will include mandatory information about what each policy covers.

The landmark change builds on reforms already announced by the Australian Governmen that includet:

• Young Australians aged 18 to 29 will benefit from premium discounts of up to 10% – which they will be able to keep until they turn 40 – which could translate to saving A$200 ($141) each year on a A$2,000 policy.
• There will be greater access to mental health services by allowing people to upgrade their coverage and avoid a waiting period. Health insurers have reported that hundreds of customers have already taken up this option.
• Australians living in rural and remote areas will get more support, with insurers now able to offer travel and accommodation benefits as part of hospital treatment cover. This will help those who can’t access treatment locally.