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Important Government Changes to Private Health Insurance

Megan Fraser Fact Checked Updated: 24 November 2023
Types of Health Insurance

You’ve heard a lot of talk about the private health insurance reforms for 2019/2020. Some of these changes have already come into effect, while others like the gold, silver and bronze health insurance tiers only has to be implemented by 1 April 2020.

Don’t get overwhelmed by all the hype. We’ve summarised the most significant government changes to private health insurance for you below.

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Private health insurance reforms summary

Some of the private health insurance reforms for 2019 include standardisation of all clinical definitions to help customers make sense of what they’re covered for. By April 2020 all health funds must adopt the 4-tier Gold, Silver, Bronze and Basic health insurance classification system, and provide at least partial coverage for mental health services, even on the lowest plan.

However, there has also been a reduction in the minimum benefits payable for devices listed on the prostheses list and many of the natural therapies are no longer available on Extras cover.

Key health insurance changes for April 1

Health insurance reform How the reforms affect you Effective date
Properly informed about out-of-pocket costs Ensuring consumers are adequately informed about the potential out of pocket costs. 2 Jan 2018
Changes to the Prosthesis list benefits Reduced expenditures on prostheses under an agreement with the Medical Technology Association of Australia. 1 Apr 2018
More support for mental health services Easier for people without full cover to upgrade and access mental health services and drug & alcohol treatment. Before 1 April 2020
New classification system The Government introduces gold, silver, bronze, and basic categories to enable standardised definitions for treatment, so there are “no nasty surprises”. 1 Apr 2019
Standard clinical definitions Private health insurers will be required to use standard clinical definitions which are consumer-friendly. 1 Apr 2019
Discounts for young Australians Providing up to 10% discounts to Australians between 18 and 29 years old. 1 Apr 2019
Increase in maximum excess levels Customers can choose to increase their maximum voluntary excess. 1 Apr 2019
Improved care for regional areas Insurers are allowed to offer travel and accommodation benefits to people in regional and rural areas. 1 Apr 2019
Support for private hospitals Hospitals grouped consistently for the purpose of calculating and paying benefits. 1 Apr 2019
Upgrading the website Making it easier to compare insurance products online. 1 Apr 2019
Strengthening the private health insurance ombudsman Ensuring customer complaints are resolved quickly and efficiently. 1 Apr 2019
Removal of rebates for some natural therapies Coverage for a range of natural treatments removed under general treatment list. 1 Apr 2019

Source: The Australian Department of Health,

Making out-of-pocket costs transparent

The Government has established a Ministerial Advisory Committee to ensure consumers are properly informed about the possibility of out of pocket costs associated with their hospital treatments.

The committee is tasked with making recommendations to the Government on how transparency can be improved, so patients will know up front what the financial impact will be if going ahead with the recommended course of treatment.

Prostheses list benefit reductions

As of April 2019, the Government will lower the minimum benefit repayable for most of the items on the prostheses list. These prostheses include:

By reducing the prostheses expenditures, private health insurers can pass these savings on to customers, resulting in lower premiums.

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Supporting mental health

Private health insurance customers on low-tier packages with limited mental health coverage are given the option of having their waiting period waived, should they choose to upgrade their policy to access mental health services.

However, you’ll only be able to use this waiver once. ‘Benefit Limitation Periods, that are sometimes applied for mental health cover, will also be removed.

New health insurance product tiers

As of 1 April 2020, all health funds will be required to adopt the new product tiers and standard clinical categories. This private health insurance reform has been introduced with the hope of helping consumers feel confident in their purchasing decision by creating easily understood cover options.

Gold is the most expensive product, covering the greatest number of procedures, while Bronze and Basic packages offer the minimum required coverage at the most affordable price.

The goal is to enable consumers to easily compare private health insurance products and understand the differences in services offered, thus providing greater certainty about what is and what is not covered.

This insurance reform is set to take effect on the 1st of April 2019. Although the Government is still working out all the details, below is a summary of what you can expect.

Gold, Silver, Bronze, and Basic health insurance tiers

According to the Private Health Insurance Reforms Draft provided in July 2018, below is a summary of what each hospital package will include. The Federal Government is still to finalise these proposed standards.

1. Basic hospital cover

The Basic category will represent the lowest-level of hospital cover and won’t have all the features listed in the health insurance Bronze, Silver and Gold tiers. This option is generally more suited toward people who purely want to avoid the Medicare Levy Surcharge or Lifetime Health Cover Loading.

Treatment covered on restricted bases include:

2. Bronze hospital package

The Bronze hospital package will consist of what’s covered in the Basic policy, either as restricted or unrestricted and must provide the below benefits as unrestricted:

The Bronze hospital plan might be for you if you are relatively young and healthy and do not plan on starting a family anytime soon.

3. Silver hospital plan

Silver hospital cover includes the treatments found in Basic and Bronze policies, and although it does not provide coverage as extensive as the Gold package, it is generally best suited toward people with active lifestyles or a physically demanding career that have an increased chance of developing back or neck injuries.

Benefits which must be unrestricted under the Silver hospital plan, include:

4. Gold hospital cover

Compare basic, bronze, silver and gold hospital plans

Hospital treatmentBasicBronzeSilverGold
Hospital psychiatric servicesRRR
Palliative careRRR
Ear, nose and throatRCP
Tonsils, adenoids and grommetsRCP
Bones, joints, and musclesRCP
Joint reconstructionsRCP
Kidney and bladderRCP
Male reproductive systemRCP
Digestive systemRCP
Hernia and appendixRCP
Gastrointestinal endoscopyRCP
Miscarriage and termination of pregnancyRCP
Chemotherapy, radiotherapy and immunotherapy for cancerRCP
Breast surgery (medically necessary)RCP
Heart, lung and vascular systemRCP
Back, neck and spineRCP
Plastic and reconstructive surgery (medically necessary)RCP
Dental surgeryRCP
Podiatric surgery provided by an accredited podiatric surgeon)RCP
Implantation of hearing devicesRCP
Joint replacements and spinal fusionRCP
Dialysis of chronic kidney diseaseRCP
Pregnancy, birth and neonatesRCP
Assisted reproductive servicesRCP
Weight loss surgeryRCP
Insulin pumpsRCP
Chronic painRCP
Sleep studiesRCP


Review the symbols below to determine what services and treatments are included within each tier

Treatment/service is a minimum requirement of the category and must be covered on an unrestricted basis.R: Treatment/service is a minimum requirement of the category and may be covered on a restricted basis.
RCP: Treatment/services is NOT a minimum requirement of the category. Insurers can choose to offer these as an additional service on a restricted or unrestricted basis. Treatment/service is NOT a minimum requirement of the category. Insurers can choose to offer these as an additional service on an unrestricted basis.

Standard clinical definitions

The Government will introduce standard clinical definitions to assist consumers in making an informed choice about private health insurance services and what each package does and does not cover.

Consumer testing is currently underway to remove product complexity and improve treatment and service understanding.

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Premium discounts for 18 to 29-year-olds

As an incentive for Australians under the age of 30 to take out private health insurers, health funds can offer up to 2% discount on premiums for each year that someone is under the age of 30, to a maximum of 10% for 18 to 25-year-olds. This discount will then remain in place until you turn 40, from where it will gradually phase out.

These discounts will be set in place to encourage young Australians to purchase private health insurance in the hope of helping young people gain access to private hospital services.

Increasing maximum excess levels

Lower your premiums by choosing a higher maximum excess level. As of 1 April 2019, you will be able to lift the cap currently placed on excess levels, from:

Improved access to travel and accommodation

Australians living in regional and rural areas will have better access to healthcare. Travel and accommodation cover will be available through your hospital policy, and not just through extras cover.

Improving transport and accommodation benefits will provide more value for money to people living in regional and rural Australia needing access to treatment not available in their local region.

Support for private hospitals

Because the use of private hospitals has gone down in recent years, the Australian Government wants to support private hospitals as they address private health insurance affordability and participation.

Upgrading the Government’s website –

By improving the assistance provided through the website, consumers will be better informed when choosing a private health insurance product that best meets their needs.

The current Standard Information Statement (SIS) will be replaced by a minimum data set by which insurers provide information to consumers in a consolidated and downloadable format.

Expanding the Private Health Insurance Ombudsman’s role

The private health insurance ombudsman will be able to conduct inspections and audits of insurers to address consumer complaints. Their focus will be on:

Removal of select natural therapy services

From April 1st, 2019 Private health insurance companies will no longer cover certain natural services usually included in extras products, for example:

The primary reason for removing these natural therapies is to ensure taxpayer funds are expended and not directed to treatments that show no real evidence of improving health.

Possible disadvantages of private health insurance changes

  • “Junk” policies are still a problem; they’ll now be known by their new title “Basic hospital cover”.
  • Bronze cover excludes 22 of the 32 hospital treatment categories and might be seen as useless.
  • Australians without top-tier coverage will no longer be covered for cochlear implants or replacement sound processors.
  • Discounts for young Australians might undermine the community rating system, which is designed to provide the same cover at the same price regardless of your age, and gender.
  • The tiered system might also undermine competition between private health insurers.

Frequently asked questions

  • How will the private health insurance reforms affect your existing policy?

    Your policy name might change by including the new classification category, for example, Top Hospital (Gold). If there are any changes to your current policy, like having the option to increase our excess amount, your health fund will inform you via email and keep you up to date.
  • When will the tiered system (gold, silver, bronze and basic) start?

    All health funds must comply with the 4-tier product classification from 1 April 2020, although some companies have already started categorising their products under the new tiers and have informed customers via email.
  • What is the maximum excess you can pay?

    From 1 April 2019, to keep premiums affordable, customers can typically choose to pay an excess of up to $750 for singles cover and $1500 for couples and families.
  • Can you still claim acupuncture under natural therapies?

    Yes, generally if acupuncture was listed as one of the benefits on your Extras policy, you might still be able to claim it. Acupuncture was not one of the natural therapies that the government requested be removed. However, it’s best to reach out to your health fund and confirm this.

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