The Australian government has announced a wide ranging package of reforms to make private health insurance simpler and more affordable.

The package includes:

• Younger Australians will be encouraged to take up private health insurance by allowing insurers to discount hospital insurance premiums for 18 to 29 year olds by up to 10%. The discount will phase out after people turn 40.
• People with hospital insurance that does not offer full cover for mental health treatment will be able to upgrade their cover and access mental health services without a waiting period on a once-off basis. This will significantly enhance the value of private health insurance for young people.
• Insurers will be able to offer travel and accommodation benefits for people in regional and rural areas who need to travel for treatment.

Health Minister Greg Hunt said in a government statement last Friday: “We're helping to reduce rising costs for health insurers – which would otherwise be passed on through higher premiums.

“To achieve this, we have entered into an agreement with the Medical Technology Association of Australia to lower the price of implanted medical devices from 1 February next year. This will have immediate benefits for consumers in the form of lower premiums from April.”

In addition, the government knows that many people would like to be able to select a higher excess in exchange for lower premiums.

Mr Hunt said: “That’s why we will increase the maximum excess consumers can choose under their health insurance policies for the first time since 2001. This will allow many consumers to reduce their premium increase in 2019.”

Knowing that many people find private health insurance confusing, the government will act to simplify private health insurance by requiring insurers to categorise products as gold/silver/bronze/basic, and use standardised definitions for treatments to make it clear what is and isn’t covered in their policies.

Committees will be established to review funding methodologies for rehabilitation care and day-only mental health care to ensure that insurers fund the most efficient models of care.