Young Aussies targeted in massive private health shake-up

Marco Green
October 13, 2017

Australians under 30 will have their health insurance premiums cut by up to 10 per cent under expected Federal Government reforms due to be announced tomorrow.

Health Minister Greg Hunt has been negotiating with the sector on the changes after approving premium rises averaging 4.84 per cent earlier in 2017.

Once Australians turn 30, they are penalised and extra 2 per cent for every year after 30 that they don't have private hospital cover, meaning that it's a lot more expensive to take out later in life.

The government will also take alternative therapies like homeopathy, reflexology, as well as yoga, off the list of items covered, while the waiting period for mental health services will be scrapped.

Key features of the 14-point reform plan include discounted premiums for young adults, greater transparency around policy inclusions and exclusions, increased access to mental health services and a $1 billion claw back from medical device manufacturers.

Prime Minister Malcolm Turnbull says the package of measures will benefit all Australians and make comparing policies easier.

But critics say the federal government's shake-up of the system will mean little difference for families and older Australians.

But it's expected a cut to the price insurers must pay for some medical devices will drive the biggest reduction in premiums.

King said trading off increases in excesses for "the prospect of slightly lower premiums" would leave vulnerable and low-income people facing "unexpected medical expenses" when they needed to claim.

Premiums have increased an average of 5.6 per cent a year since 2010, but the minister wouldn't put a figure on how much that could fall.

"I'm working with the private health insurers to help drive down premium pressures and they have guaranteed in writing they will pass through all of the cost savings".

Also among the overhaul, existing health fund policies will be classified as gold, silver and bronze.

It will work in the inverse to the lifetime health cover (LHC) loading, which levies a 2% increase on premiums for those who don't have private hospital cover by the July following their 31st birthday.

'That means people will have clear choices and clear explanations in a way that has never been the case, ' Mr Hunt said.

That discounted rate would remain until they are 40, after which it would be phased out.

The CEO of the Consumers Health Forum of Australia, Leanne Wells, praised clearer labelling of health policies and "ambitious" prostheses cost savings, which she said "appear likely to deliver not only lower premium increases in the medium term".

"Consumers in private hospitals have been paying wildly inflated prices for medical devices sometimes as much as five times what it costs in the public system for exactly the same device", he said.

'The biggest problem in the affordability of private health insurance is the amount that's going into the pockets of the for-profit insurers, ' he told ABC radio.

"It's clear from this package that the Turnbull Government only cares about getting as many people as possible to sign up for private health insurance - it doesn't care about what happens when they try to use it", she said in a statement.

The role of the Private Health Insurance Ombudsman will be expanded and strengthened, allowing it to conduct inspections and audits of private health insurers to ensure they are meeting regulatory obligations.

"In an environment where the cost of healthcare continues to rise, reforms like this are paramount to addressing the issue of affordability".

Other reports by Click Lancashire

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