• Ben Graham-Nellor

Smart.Happy.Money 25: Health Insurance- A dark science?


Each year on 1 April, the premiums for private health insurance increase. It is just part of the annual cycle; however, I don’t see the joke – the date being April Fool’s Day!

This year there is going to be a lot more than premium increases happening in the private health insurance world.

In late January I received an email from my private health insurer pre-empting some of the changes that I would be seeing. This prompted me to start to do a little research.

The Australian Government is making changes that will impact on the cover held by members. The changes have been described as the most significant to private health insurance in 20 years

Not only are significant changes being made to the way hospital cover is structured, but a number of ‘extras’ type items are being removed. This is mainly in the realm of natural therapies – things like naturopathy, homoeopathy, pilates, reflexology, yoga and the like.

In order to try and simplify the comparison of cover between health insurers, hospital cover will be categorised as ‘basic’, ‘bronze’, ‘silver’ and ‘gold’. Naturally, the gold cover will offer the broadest cover and will also be the most expensive.

The basic policies will cover very little indeed. These have previously been described as ‘junk policies’. That is policies that allow people to avoid paying the Medicare surcharge, but which offer very little cover at all.

Bronze policies will cover 18 categories of services in a private hospital including breast, skin and prostate cancer surgery, broken bones, joint reconstruction (but not joint replacement), and ear, nose and throat surgery.

The next level up is the silver level. This will cover all the services offered under the basic and bronze cover levels plus an additional 8 categories of cover including heart surgery, surgery for lung cancer, bone marrow transplants and medically necessary plastic and reconstructive surgery.

The ‘Rolls Royce’ of hospital cover will be the gold level. If you are planning on having a baby, and you want the expenses covered by your private health insurance, the ‘gold’ policy is the one you will need.

Private health insurance has always been a bit of a ‘dark science’. For many of us, selecting the cover we think is appropriate for our needs is a bit of a stab in the dark. We sign up and hope like mad that if we ever have a claim, our private health insurance will cover us.

The sad reality is, this is not always the case.

So, if you have private health insurance, or are thinking of taking it out, spend a little time exploring the options, and how your cover may change from April this year.

For more information, particularly in relation to the changes to hospital cover, have a look at the following link: Health Insurance Reforms – April 2019.

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Peter Kelly believes people have the right to accurate, affordable and unbiased information that addresses all aspects of their preferred retirement lifestyle, thereby giving them the opportunity to make informed decisions that will empower them to live out their lives with dignity, certainty and security.

BGN Financial Management Pty Ltd is a Corporate Authorised Representative 468796 of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558 www.centrepointalliance.com.au

The information in this communication has been prepared on a general advice basis only. The advice has been prepared without taking account of your specific objectives, financial situation or needs. Accordingly, you should, before acting on the advice, consider the appropriateness of the advice having regard to your objectives, financial situation and needs. In cases where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement (or other relevant information statement) and consider such document before you make any decision about whether or not to acquire the product. For these reasons, it is imperative that you seek advice from your financial adviser before making any investment decisions.

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