Private health insurance reforms
We have made changes to private health insurance to make it simpler and easier for you to choose the cover that best suits you and your family.
Choosing the right private health insurance can be confusing.
That’s why the Australian Government is introducing reforms to make the choice easier for everyone.
Now private health insurers must group all private hospital cover into four tiers: Gold, Silver, Bronze and Basic, each with minimum inclusions.
Making it easier to choose the right insurance for you.
To find out more about the reforms, visit health.gov.au
Private Health Insurance made simpler.
Authorised by the Australian Government, Canberra.
Why the reforms are needed
More than half the Australian population – about 13.6 million people – have private health insurance, but many people don’t fully understand what they are getting for their money and what they are covered for.
Australians have told us they find private health insurance complex and hard to understand what different policies cover and what they do not.
We want to make private health insurance simpler and easier for you to choose the cover that best suits you and your family.
What the reforms include
First wave of reforms
The first wave of reforms included the following:
- Private hospital cover will be classified in 4 easy to understand tiers
– Gold, Silver, Bronze or Basic
- Health insurers will be able to offer:
- discounts for young people aged between 18 and 29
- higher excesses in exchange for lower premiums
- travel and accommodation benefits for people who have to travel long distances for hospital treatment
- improved access to mental health treatment by allowing people to upgrade their hospital cover without re-serving a waiting period.
- Insurers will no longer be able to offer benefits for some natural therapies as part of ‘extras’ policies.
- The Private Health Insurance Ombudsman has strengthened powers to investigate complaints and other issues.
Second wave of reforms
The second wave of reforms included the following:
- Increasing the age of dependants
- Transparency of out-of-pocket costs (see our Medical Costs Finder)
- Expanding home and community-based mental health and rehabilitation care
- Actuarial studies of incentives (find more information on the AusTender website).
Find more information on the second wave of reforms in the 2021–22 Budget fact sheets.
Increasing the age of dependants
The Australian Government is committed to improving the affordability, value, and attractiveness of private health insurance, particularly for younger Australians. Increasing the age of dependants able to stay on a family policy, from 24 years of age to up to 31 years of age, will make it easier for young people, and also people with a disability, to maintain private health insurance.
How the increase to the age of dependants will work
The Private Health Insurance Legislation Amendment (Age of Dependants) Bill 2021 will change the maximum allowable age for people to be covered under a family private health insurance policy as a dependant and enable people with a disability, regardless of their age, to be covered under a family private health insurance policy as a dependant.
While some aspects of the definition of dependants are in legislation, such as age ranges and partner status, insurers can define the nature of the dependency in their insurer rules.
The definition of a person with a disability will be a person who is a participant in the National Disability Insurance Scheme (NDIS). However, is important to note that insurers will have flexibility to offer cover to people with a disability that are not participating in the NDIS.
When this reform will begin
Insurers are in the process of considering the legislative amendments and developing new products for this reform measure, which may take some time to implement. Insurers interested in implementing the changes have indicated they expect to be ready to offer extended dependant products in the second half of 2021.
Learn more about the increase to the age of dependents.
Third wave of reforms
- Extension to the Medicare Levy Surcharge (MLS) and Private Health Insurance (PHI) Rebate for a further 2 years
- Review and enhance the Government’s PHI Rebate Model
- Investigate private hospital default benefit arrangements
- Improvements to the certification process for admitting patients to hospital.
These resources contain information for the general public on reforms to private health insurance. Resources include fact sheets, an infographic and a video about the product tiers.
Private health insurance reforms campaign
A consumer information campaign, first launched on Sunday 17 February 2019, is helping Australians better understand the Australian Government’s reforms to make private health insurance simpler.
Campaign materials are available below. Many of these are also available in 5 other languages.
These campaign materials outline the Government’s reforms to private health insurance.
Several resources are available in English and 5 other languages, including Simplified Chinese, Traditional Chinese, Arabic, Vietnamese and Korean.