Important Government Changes to Private Health Insurance

Published: April 2, 2019

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.

Click on the health insurance reform you’d like to learn more about, and the page will scroll down to the relevant section.

Key health insurance changes for April 1

Source: The Australian Department of Health,
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 Feb 2018
More support for mental health services Easier for people without full cover to upgrade and access mental health services and drug & alcohol treatment. 1 Apr 2018
New classification system The Government introduces gold, silver, bronze, and basic categories to enable standardised definitions for treatment, so there are “no nasty surprises”. Before 1 April 2020
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

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:

  • Ophthalmic,
  • ENT,
  • Urogenital,
  • Cardiac and cardiothoracic,
  • Vascular, and
  • Orthopaedic

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.

  • 4 categories for Hospital products: Gold, silver, bronze and basic
  • 3 categories for Extras (general treatment): Gold, silver and bronze

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.

  • 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:

    • Rehabilitation
    • Hospital psychiatric services
    • Palliative care
  • 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:

    • Brain
    • Kidney and bladder
    • Eyes
    • Ear, nose, and throat
    • Skin
    • Tonsils, adenoids and grommets
    • Hernia and appendix
    • Bones, joints, and muscles
    • Joint reconstructions
    • Kidney and bladder
    • Male reproductive system
    • Gynaecology
    • Miscarriage and termination of pregnancy
    • Breast surgery (medically necessary)
    • Digestive system
    • Gastrointestinal endoscopy
    • Chemotherapy, radiotherapy and immunotherapy for cancer
    • Diabetes

    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.

  • 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:

    • Heart, lung and vascular system
    • Blood
    • Back, neck and spine
    • Dental surgery
    • Implantation of hearing devices
    • Podiatric surgery
    • Plastic and reconstructive surgery (medically necessary)
  • Gold hospital cover

    The Gold hospital tier is the ultimate cover option and must include unrestricted cover for all clinical categories under Basic, Bronze and Silver, as well as:

    • Pregnancy, birth and neonates
    • Assisted reproductive services
    • Cataracts,
    • Joint replacements and spinal fusion,
    • Dialysis of chronic kidney disease
    • Chronic pain
    • Insulin pumps
    • Weight loss surgery
    • Sleep studies

    The Gold hospital tier is generally best suited toward couples starting a family or senior Australians requiring cover for things like cataracts and joint replacements.

Compare basic, bronze, silver and gold hospital plans

Hospital treatment Basic Bronze Silver Gold
Rehabilitation R R R
Hospital psychiatric services R R R
Palliative care R R R
Brain RCP
Ear, nose and throat RCP
Tonsils, adenoids and grommets RCP
Bones, joints, and muscles RCP
Joint reconstructions RCP
Kidney and bladder RCP
Male reproductive system RCP
Digestive system RCP
Hernia and appendix RCP
Gastrointestinal endoscopy RCP
Gynaecology RCP
Miscarriage and termination of pregnancy RCP
Chemotherapy, radiotherapy and immunotherapy for cancer RCP
Skin RCP
Breast surgery (medically necessary) RCP
Diabetes RCP
Heart, lung and vascular system RCP
Blood RCP
Back, neck and spine RCP
Plastic and reconstructive surgery (medically necessary) RCP
Dental surgery RCP
Podiatric surgery provided by an accredited podiatric surgeon) RCP
Implantation of hearing devices RCP
Cataracts RCP
Joint replacements and spinal fusion RCP
Dialysis of chronic kidney disease RCP
Pregnancy, birth and neonates RCP
Assisted reproductive services RCP
Weight loss surgery RCP
Insulin pumps RCP
Chronic pain RCP
Sleep studies RCP

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:

  • Verifying customer activity records,
  • Resolving consumer complaints, and
  • Investigating private hospital and insurer contractual agreements

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:

  • Homoeopathy,
  • Herbalism,
  • Aromatherapy,
  • Bowen therapy,
  • Pilates, yoga, and tai chi
  • Kinesiology, and
  • Reflexology

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.

Review how government changes to private health insurance effects you

Frequently asked questions and answers

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.

Thanks for reaching out!

We will review your comment and get back to you as soon as possible. If your inquiry is urgent, please use the phone number listed at the top of this page.

Talk to you soon.

Ask an Expert?


  • Kim |

    Removal of Pilates does this include Pilates class with a supervised Physiotherapist?

      Anneke Van Aswegen |

      Hey Kim, great question!
      This will generally depend on the health insurer and policy type you choose. If Pilates is required as part of your physiotherapy and recommended by your GP then coverage might be possible. It all depends on the insurer’s terms and conditions.

      Please feel free to contact a consultant on 1300 786 328 for guidance.

  • william Jarvis |

    Are the existing benefits of the BUPA silver policy, i.e total knee replacement, grandfathered after April 2019?

      Anneke Van Aswegen |

      Hello William,

      You’ll need to contact Bupa directly regarding this query. In general, the minimum benefits paid for items on the prosthesis list, like a knee replacement, will be lowered.

  • Ron |

    Is it true that if you don’t have top cover you are no longer covered for a cataract operation in day hospitals surgery?

      Anneke Van Aswegen |

      Hello Ron.

      With the government implementing standard definitions of procedures and therapies for all Hospital policies (Gold, Silver, Bronze and Basic), only Gold Hospital policies, which is generally seen as the top Hospital policy, will have no restrictions on any medically necessary hospital treatments.

      Meaning, other less comprehensive policies like Silver do not have to include certain high-cost services, such as cataract surgery. However, while they don’t have to include such procedures, the health fund can still choose to cover it in their other Hospital plans. So, it all depends on the private health insurance provider you choose.

  • Colin Holmanb |

    In 2016 I had a knee arthroscopic procedure and miniscule repair. We have top cover from HCF. This procedure was fully covered. I had to have the same procedure done in Dec 2018, and it cost 500 dollars. I was told it was a government decision. We are pensioners, please explain.

      Anneke Van Aswegen |

      Hello Colin,

      Because I’m not sure of all the details regarding your policy, there could have been many reasons for the $500. For example, maybe this was your hospital excess for admission or the surgery now costs more than it did in 2016, but your policy has not increased the amount they pay toward the service or they have reduced the amount they contribute.

      Please contact HCF directly and have them provide you with a detailed breakdown of the costs and what they paid for.

  • Sarah |

    Hello. I am booked in for weight loss surgery 14th April 19. I am currently covered and have been booked in for a month. Does my insurer have to honour this?

      Anneke Van Aswegen |

      Hi Sarah.
      Because I’m not aware of the policy or level of cover you have, I cannot provide a sufficient answer. It is best to contact your insurer directly.

  • Karen Johnson |

    Quotes for different health Insurance companies

      Anneke Van Aswegen |

      Hi Karen.

      Please fill in the quote form above with your specific requirements so that quotes can be gathered for you. A specialist will then give you a call to help you choose a policy best suited to you what you want coverage for.