New Private Health Insurance Tiers: Simple Explainer

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If you’re a CUA Health member, you should have received communication from us explaining the changes to your policy, which came into effect on 1 April 2019. Are you up-to-date with the new private hospital health insurance classification system? If not, we’ve explained the main changes below and answered some of the most common questions.

By now, you may have heard about the wide-ranging changes to private health insurance from April 2019.

One significant change is that insurers now have to classify their private hospital policies into a tier – which will be known as Gold, Silver, Bronze or Basic.

While these changes will make everything easier in the long run, this new classification is a significant change for private health insurance members.

We’ve spoken to a health insurance expert to help explain these changes and understand what it means for you.

How is Gold, Silver, Bronze and Basic different to before?

Before, funds used to categorise their cover as Top, Medium or Basic and it was up to individual health funds to decide what services were included in each.

Now, all health insurance hospital products must fit into a tier – Gold, Silver, Bronze or Basic - with each tier required to cover minimum medical categories. The further down the tiers you go, the less categories you have access to, with Gold covering 38 and Basic just three.

“This will be standard across the industry, meaning when you compare a Bronze hospital cover from one health insurer to another, you will have the same minimum level of cover,” explains Sarah Keogh, a product adviser at CUA Health.

For example, for a hospital policy to be classified as Silver, it has to include certain categories additional to the Bronze tier, including ‘back, neck and spine’ and ‘dental surgery’. For a hospital policy to be Gold, it also needs to include categories like ‘weight loss surgery’, ‘insulin pumps’ and ‘assisted reproductive services’. You can find a full list of category inclusions here.

When you look at this list, you may notice that some categories have an (R) marked next to them – this means they are restricted. In other words, the fund will only pay a limited amount and you will likely face out-of-pocket expenses.

And while there are now 38 categories instead of the five to ten that funds used to have, Sarah says that’s a benefit.

“Having more categories can initially be challenging to get your head around. However, it’s worth it to get that additional transparency, to know exactly what you’re covered for,” Sarah says.

What else do I need to know about these new clinical categories?

As well as standard tiers, health funds will also have to use consistent wording and inclusions.

“Up until now, funds have used different terms to describe the same service. For example, one fund might talk about ‘heart’ and another might talk about ‘cardiac’. Now, all funds will have to call it ‘heart and vascular system’,” says Sarah.

Also, insurers used to be able decide which hospital treatments were included under each category. This means if you were comparing funds, it could be difficult to know exactly which of the potentially dozens of treatments you could access.

Now, if your hospital policy covers ‘heart and vascular system’, then there is a set list of services (all with their own Medicare item number) which you are covered for, no matter which fund you are with.

To allow for additional services, funds will also be able to use a new ‘plus’ category.

“The ‘plus’ categories can seem confusing, but all it means is that it contains a bit extra. For example, a ‘Bronze Plus’, has more inclusions than Bronze, but not enough to bring it up to the next level of Silver,” says Sarah.

“It’s just a matter of checking what those extra inclusions are.”

How will this make health insurance easier for me?

“This will definitely make it easier to compare policies across all funds,” says Sarah.

However, if there are changes to your existing policy, you need to be aware of what is now included. For example, your Basic policy under the new system may cover less than your Basic policy covered before.

“At CUA Health Insurance, we’ve tried to make as few changes as possible, to make this an easy transition for our members,” she explains. “For example, if you were on CUA Health’s Basic before, you will be classified as Basic Plus now.”

Look out for a notification from your health insurance provider explaining any changes to your existing policy and make sure you read it carefully.

Why I am covered for some things and not for others?

If you’ve looked down the list of new clinical categories and can’t understand why you are covered for some things and not others, you’re not alone.

“We find a lot of people are confused about this. For example, if you are on a Bronze hospital insurance policy, you are covered for ‘miscarriage and termination of pregnancy’ (even if you are a man or not of childbearing age), but not pregnancy and birth, which is only available on Gold cover. Or, if you are on Silver or Bronze you are not covered for ‘cataracts’, but you are covered for ‘eyes (not cataracts)’,” Sarah says.

“Just remember that these categories have been fine-tuned as part of the government’s consultation process, and are designed to be as fair and as easy as possible for everyone,” Sarah says.

What next?

Hopefully, this information has helped you understand any changes to your policy.

If you’re a CUA Health member, you should have already received a communication with details of your premiums and any policy changes effective 1 April 2019. There is an industry transition period for these new reforms but CUA Health has introduced most of the changes ahead of time.

For any questions about your new policy, or if you’d like to review or discuss your options, please contact our friendly customer service team Mon – Fri: 8.00am – 5:00pm (AEST) on 1300 499 260.

If you’re considering switching health funds, then remember CUA Health has a 4% discount for members who direct debit from a CUA transaction account, and if you are between 18-29 years old, you could get an additional 2% discount for every year you are under 30, so contact us to find out more.

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