Here at Talking Cents, we chat with experts about shares, tax, super, insurance, property, loans and more to find out exactly what you need to know in order to get ahead.

Changes to Health Insurance

Changes to Health Insurance

From April 1st this year, there are multiple important changes being introduced to Private Health Insurance! The government have made a number of reforms including the ability for insurers to offer discounts for younger people, changes to the way hospital cover works and the removal of some minor services. On today's episode we check back in with Andrew Davis from Health Insurance Comparison to find out about these changes and what they mean for young people! If you haven’t heard our first episode with Andrew and want to understand more about Private vs. Public Health Insurance, check it out here.

Every year there is an increase in health insurance premium. However this year, things are a little different. Let’s break this all down...

How do you know how much your health insurance premium will increase by?

All insurers change their rates at the same time, but not at the same rate. The average rate is just over 3%, but some policies might still go up by 7 or 8%. This is why it’s often a good time to have a look at your policy and re-access what cover you need before it goes up.

What are the discounts for under 30’s?

From April 1st 2019, insurers will be able to offer premium discounts on hospital cover of 2% for each year that a person is aged under 30. This means you can get a 10% discount if joining at age 18-25, 8% for 26 years old, 6% for 27 year olds, 4% for 28 year olds  and 2% for 29 year olds. The discounts essentially are designed to make private health insurance more affordable for young Australians, and encourage them to take out cover.

What to consider with the discount:

Once you obtain this age-based discount, you will retain it until you are 41 years of age provided you hold the same policy. This means if you change policies at any stage, the discounts stops. This could quite possibly change in the future, as people change policies depending on circumstances very often. Regardless, make sure that you access the cover that you need. Just because there is a 10% discount on a policy, doesn’t mean you might need that cover at all.

How will hospital cover change?

All private hospital cover will be classified in tiers as Gold, Silver, Bronze or Basic cover (The higher the tier, the more categories it covers). What is and isn’t covered in these tiers will be based on new minimum standard categories. It essentially will make policies easier to compare. Health insurers will still be able to offer more than the minimum requirements by using either the word 'plus' or a '+' sign in the policy name.

What else is changing?

At the moment, the maximum allowable excess (the amount you pay) if you are admitted to hospital is $500, but this will be increasing to $750. This higher excess is probably a good thing as it will allow insurers to drop the price of the policy a bit.

Lastly,  insurers will no longer be able to offer benefits for some natural therapies as part of ‘extras’ policies. You can find the list here. Removing these natural therapies is due to a decision to redirect taxpayers’ funds away from therapies that do not demonstrate evidence of clinical effectiveness.

Lets recap:

  1. On April 1st, private health premiums will be going up (as they do every year).

  2. Hospital cover will be classified in tiers as Gold, Silver, Bronze or Basic cover.

  3. Insurers will be able to offer premium discounts on hospital cover of 2% for each year that a person is aged under 30.

  4. The maximum amount you will have to pay if admitted to hospital will increase to $750 (but this higher excess will mean a cheaper premium) .

  5. Some natural therapies are getting excluded from ‘extras’ policy.

To find out more about these reforms, head to the Australian Government Department of Health

Negative gearing and capital gains tax

Negative gearing and capital gains tax

Shares 2.0 Researching, Buying and Selling

Shares 2.0 Researching, Buying and Selling