PHI reforms

The Federal Minister for Health released the details of a series of reforms to private health insurance in July 2018 to come into effect from 1 April 2019. These reforms are designed to improve the affordability of private health insurance, enhance the visibility of out-of-pocket costs for members, and make private health insurance easier for Australians to understand. Some reforms are mandatory and others are optional for health funds. Funds have the option to introduce the reforms throughout 2019 and GU Health has chosen to introduce the reforms on 1 April 2019.

While these reforms are mandatory for resident health covers, we believe for consistency and transparency our non-resident covers would benefit from these changes. All of GU Health’s non-resident covers continue to meet Visa requirements. We will therefore be applying these reforms to resident and non-resident covers from 1 April 2019.

Introducing new product tiers and clinical categories

Two of the reforms impact the services that hospital cover includes and how this information is presented to members. The first reform introduces mandatory product tiers for hospital cover. Private health insurers must ensure their hospital policies fall into one of four tiers: Gold, Silver, Bronze or Basic. Each product tier has a minimum list of services that must be included. This reform is designed to reduce the confusion members may face when choosing a cover and when they wish to compare that cover to other covers.

The second reform introduces standard clinical definitions. These definitions will be standard across all health insurers and will replace existing hospital inclusion and exclusion descriptions which can vary between different private health insurers. For example, Major Eye services will be replaced by two categories; Eyes (not cataracts) and Cataracts. Below you will see an example of GU Health’s product tier stamping.

All hospital tier levels FEB2020

Changing coverage for some natural therapies

Following a review that found that there was no clear evidence demonstrating the efficacy of certain natural therapies, the Australian Government made the decision that the Private Health Insurance rebate will no longer apply to 16 services previously covered within the natural therapies/health management categories.

From 1 April 2019 the health insurance industry will no longer be able to pay benefits for Alexander technique, aromatherapy, Bowen therapy, Buteyko, Feldenkrais, western herbalism, homeopathy, iridology, kinesiology, naturopathy, Pilates, reflexology, Rolfing, shiatsu, tai chi, and yoga on extras cover. For GU Health, this includes the removal of benefits from Extras cover for remedies dispensed by recognised providers such as naturopaths or herbalists.

Information provision

This reform gives health funds the flexibility to provide product information to members in a variety of formats so that the member is able to select how they want to receive it. The Standard Information Statement (SIS) will be replaced with a Private Health Insurance Statement (PHIS), the Lifetime Health Cover statement can be combined with an annual contribution change communication and GU Health will no longer be required to send Tax Statements.

If you are on a resident hospital cover or Reciprocal Health Care Agreement (RHCA) hospital cover, you will have been receiving Tax Statements. Your Tax Statement in July 2019 will be the last one you will automatically receive by post unless you request it. In subsequent years your health cover information will be sent only to the Australian Taxation Office and will be available to you or your registered tax accountant to view when submitting your tax return.

Easier to understand

As a result of the hospital product categorisation reform (Basic, Bronze, Silver, Gold), consumers will benefit from a consistent approach across the health insurance industry. Included and excluded benefits will also be communicated in the same way with new clinical categories, helping members understand what they are covered for. GU Health has adopted the same approach for our Overseas Visitors Covers to ensure a consistent experience for all our members, especially when transitioning to a resident cover.

To meet the minimum requirements for the product tier, many of our hospital covers now have additional benefits such as Eye (excluding cataracts) and Podiatric surgery where these were previously restricted or excluded. Where a member has access to new benefits, they can claim straight away from 1 April 2019 provided they have completed the minimum required waiting periods on their cover e.g. 12 months for pre-existing conditions.