Australia has one of the best public healthcare systems in the world. Australians have the option to take out private health insurance to save on tax through reduced Medicare Levy Surcharge, have the ability to choose their own doctor, and avoid lengthy waiting periods.
However, the private health industry has received increasing criticism over recent years due to rising costs, and a number of Australians have chosen to opt out of having private health insurance, as it becomes less of a priority due to cost of living pressures.
13.5 million Australians have private health insurance and 84% of Australians with existing private health insurance wish to keep their cover, but are often concerned with affordability and ‘value for money’. Premiums have increased on average 5.6 percent a year over the last seven years, and membership of private health funds have been falling by around 10,000 people per month.
This month the Federal government released details of changes to the health insurance system, the biggest changes in 15 years, with the aim of making private health insurance less complex and more affordable.
The changes include:
- Discounts for people under 30, to encourage younger people to take out private health insurance;
- More appropriate cover for people in rural areas;
- Increased access to mental health care;
- Decreased charge on insurers for medical devices and prostheses;
- Discontinued rebates for unproven natural therapies;
- The ability for members to increase excesses to reduce premiums and;
- Improved government website to assist people to find the right insurance provider for their needs.
People under the age of 25 are typically included in their parent’s private health insurance. It is hoped that if more young Australians take up health insurance, as they will be less likely to claim, and will therefore lower premiums for everyone who has private health insurance. From April 2019, Private health insurers will be able to offer discounts to 18-29 year olds up to a maximum of 10%.
Reduced costs to insurers for prostheses and medical devices will save them around $1 billion over the next four years, with the expectation that the savings will result in reduce premium increases by about 1 per cent per year. Those living in rural areas will be able to access travel and accommodation assistance.
The changes have been welcomed by the Australian Medical Association, but the organisation believes more must be done to ban ‘junk policy’ insurance products, which offer limited cover. Advocates for mental health also welcome the changes, but believe more needs to be done to extend community mental health services, and stress the importance of a greater focus on prevention, rather than relying on hospitals to provide care to those who are acutely unwell.
If you are a health professional interested in working in Australia in either the public or private health system, get in touch with us today.