Will changes to private health reduce confusion?

Will new Bronze, Silver and Gold health covers make health insurance simpler?

Private health confusion

The most wide-ranging reforms to health insurance in the last two decades have been introduced by the federal government, with most changes due to come into effect from April 2019. 

Gold, Silver, Bronze and Basic product tiers are being sold as a solution that will make health insurance simpler, but the reality is far from that.

In this article:

What to expect from your fund, when to switch and how to save: More advice on health insurance.

Video: Health insurance changes – clarity or confusion?

Will the reforms reduce confusion?

Gold, Silver, Bronze and Basic should, in theory, make choosing a policy simpler, however the proposed product tiers are not four options. Insurers can label their products as 'Plus', creating seven categories, and then there are literally billions of versions of potential policies.

The set-up of these categories plays into the hands of insurers who now have the means to better market their products, while consumer confusion remains unaddressed.

Category confusion

Previously there were around 12 categories of often-excluded treatments, now there are 38 categories. And the definitions of these treatments aren't always easy to understand. For example:

  • Chemotherapy is covered in Bronze policies, but cancer surgery cover depends on which clinical category it falls under. For example, lung cancer surgery would only be covered by Silver and Gold policies.

  • Eye is covered in Bronze policies – but that includes only part of the services needed for your eye. If you need an eyelid procedure, that's plastic and reconstructive surgery covered under Silver policies and if you have a cataract you'll need a Gold policy to be covered.

  • Podiatric surgery is listed as covered for a Silver policy, but this cover only relates to the hospital accommodation and any necessary prostheses, while the surgery itself still isn't covered

But wait, there's more

Insurers can also offer Basic Plus, Bronze Plus and Silver Plus policies.

These policies cover additional treatments available in a higher category, so for example: 
  • Silver Plus could contain cover for all Silver treatments and pregnancy.
  • Bronze Plus could contain all Bronze treatments plus heart surgery.

Take our quiz: Should you choose Gold, Silver or Bronze hospital insurance?

Communication concerns

The federal government has created a factsheet to explain what treatments are included in Gold, Silver, Bronze and Basic policies. 

But it doesn't address the confusion surrounding categories, or explain what's included in any 'Plus' policies. 

Hospital treatment product tiers gold silver bronze and basic - fact sheet

Image source: Hospital Treatment Product Tiers – Gold, Silver, Bronze and Basic, health.gov.au.

Changes to your cover

If you're shifted from your current policy to a new one you may end up with less cover. For example: 

  • Budget cover policies currently include all cancer surgery – the new Bronze cover policies include only some cancer surgeries.
  • Medium cover policies currently have full cover for rehabilitation, palliative care and psychiatric treatment in private hospital – the new Silver policies only offer restricted cover in public hospital for these treatments.
  • Only expensive Gold and perhaps some Silver Plus policies include cover for pregnancy and birth.

What if I already have health insurance?

There's a transition period from 1 April 2019 to 1 April 2020. If you already have a policy it may stay in its old format until 1 April 2020 so very little will change for you. From 1 April 2020, everyone will need to have a policy in the new system. 

It's not yet known when insurers will convert old policies into the new system, or whether they will close old policies and move you to a new one.

Australians with private health will need to make sure that if they're being moved to a new policy, they know what they'll be covered for and whether there will be any changes on their existing policy. 

Read our guide: How to read the letter from your health insurer

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