The Australian Government has a range of initiatives and programs to encourage Australians to protect themselves with private health insurance.

Australian Government Private Health Insurance Rebate

Australians who take out private health insurance cover are eligible to receive the Australian Government Rebate to help cover the cost of their premiums.

This rebate is income-tested and based on your ‘status’ of 30 June. So if you were single, had a spouse or were a single parent on 30 June, then this is the threshold applied to your Private Health Insurance Rebate.

You may claim the private health insurance rebate if you:

  • are eligible for Medicare
  • have a residential hospital cover, an extras cover (also known as ancillary cover) or both
  • have an income for Medicare Levy Surcharge purposes

From 1 July 2015 to 1 July 2020, the income thresholds used to determine a person’s eligibility for the Rebate are based on the following table.

Income threshold table

 

The Rebate percentages are adjusted an annually on 1 April based on the Rebate Adjustment Factor. The current percentages are as follows.

Rebate table
Private Health Insurance Rebate effective from 1 April 2019

There are two ways you can claim your rebate:

  • As a premium reduction through Doctors’ Health Fund. To do this, please call us on 1800 226 126.
  • As a tax offset when lodging your annual tax return. For more information, visit the Australian Taxation Office website at www.ato.gov.au or call 132 861.
The Medicare Levy Surcharge (MLS)

This is levied on Australian taxpayers who earn above a certain income and do not have private hospital cover.

The surcharge is calculated at the rate of 1% to 1.5% of your income. It is in addition to the Medicare Levy of 2%, which is paid by most Australian taxpayers.

MLS
Medicare Surcharge levels applicable from 1 April 2019 - 1 March 2020

To work out your annual income for MLS and Rebate purposes, you can refer to the Australian Taxation Office’s Private Health Insurance Rebate Calculator or contact the ATO directly on 132 861.

Lifetime Health Cover (LHC)

LHC is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their hospital cover. It does not affect extras cover.

This is how it works:
If you did not have hospital cover with an Australian registered health fund on your Lifetime Health Cover base day and then decided to take out hospital cover later in life, you pay a 2% loading on top of your insurance premium for every year you are aged over 30.

What's my base day?
In most cases, your LHC base day is the 1st of July following your 31st birthday, after 1 July 2000.

For example, if you first took out hospital cover at age 40 you pay 20% more than someone who first took out hospital cover at age 30.

Once you have paid LHC loading on your private health insurance for 10 continuous years, the loading is removed.
Your loading will remain at 0% as long as you retain your hospital cover, or if you cancel your cover after the loading is removed, as long as you do not exceed your permitted days without hospital cover.

To cover small gaps, such as switching from one insurer to another, you can stay without private health insurance for periods totalling 1,094 days (i.e.) three years less one day during your lifetime, without affecting your loading.

New migrants
As a new migrant to Australia, if you are aged 31 or over you will not have to pay LHC loading if you take out private health insurance within 12 months of being registered for Medicare. After this time you will have to pay 2% more for each year you are aged over 30 when you take out private health Insurance.

Visit www.privatehealth.gov.au for detailed information about how LHC works and the exemption categories.

Alternatively, you can email us at info@doctorshealthfund.com.au or call to speak to one of our expert Member Service specialists on 1800 226 126.

Private Health Insurance Reforms

More than half the Australian population – about 13.5 million people – have private health insurance, yet many find it complex and difficult to understand what their policy covers, and what it doesn’t.

The Private Health Insurance (PHI) Reforms announced by the Australian Federal Government in September 2018 have been introduced to help make private health insurance simpler, more affordable and easier for people to choose the cover that best suits them. These reforms will come into effect from 1 April 2019 and we have detailed all you need to know about the upcoming changes below.

What are the PHI Reforms:

  • Categorising hospital policies as Gold, Silver, Bronze or Basic; including ‘plus’ categories for any products that include services above the minimum requirement

  • Implementing new standard definitions for all hospital treatments

  • Introducing discounts of up to 10 percent for those under the age of 30

  • Allowing consumers to choose a higher excess on hospital policies

  • Removing cover for a range of natural therapies

  • Offering travel and accommodation benefits for people in regional and rural areas

  • Strengthening the powers of the Private Health Insurance Ombudsman

You can view a comprehensive list of the changes at www.health.gov.au

Product categorisation & standard definitions

Insurers are now required to categorise their products in four new tiers; Gold, Silver, Bronze or Basic. For a product to fall into one of these categories it must cover everything listed within this tier. If a product offers additional coverage above the minimum requirement it can be categorised as a ‘plus’ product; for example our Smart Starter Bronze Plus. 

This categorisation is a positive change to private health insurance, and should make it much easier for members to identify their level of cover.

Health insurers will also need to use standard clinical definitions for all hospital treatments; this means that the language used will be consistent and easier to understand across all funds and policies. For example a spinal surgery will be covered under the back, neck and spine clinical definition and this will be consistent across all health funds.

Discounts for 18 to 29 year olds

From 1 April 2019, insurers will have the option to offer people aged 18-29 discounts of up to 10% on their private health insurance hospital premiums.

The discount allowable is between 2% and 10% per annum; depending on when a person purchases health insurance between the age of 18 and 30. For couples and family policies, it will apply individually to the two adults on the policy.

Members will retain that discount until they turn 41, after which it reduces at 2% per annum until they are 45 years old.

The introduction of this initiative recognises the importance of private health cover for young people and aims to provide them with cover that is more affordable. We will be supporting this new initiative and will be passing on the full discount to eligible members. 

The table below outlines the discount applicable based on your age. It is determined by the age you are on 1 April 2019 or your age when you take out cover for the first time after 1 April 2019:

youth discount table

Increase of maximum excess

Excess levels have been set at a maximum of $500 for singles or $1,000 for couples and families for almost 20 years. Under the new changes, insurers can now offer an excess on hospital policies of up to $750 for singles, and $1,500 for family/couples, allowing members to choose a higher excess in return for lower premiums. Although this change gives members a greater level of choice, you should consider the increased cost of the excess when it comes to unexpected hospital admissions.

Removal of natural therapies

A review of natural therapies chaired by the former Commonwealth Chief Medical Officer found no clear, scientific evidence that demonstrated the effectiveness of certain natural therapies covered by private health insurance.

Consequently, private health insurers will no longer be a

We have not previously provided benefits for these therapies, except for Pilates services delivered by a physiotherapist. It is important to be aware that benefits will continue to be paid for physiotherapy services that include exercises drawn from Pilates but no benefits can be paid where the physiotherapy service consists solely of Pilates.

Travel and accommodation benefits

Members living in regional and rural areas sometimes need to travel to urban centres or capital cities to receive specialist medical and hospital treatment not available in their local town. This reform will allow insurers to expand their hospital cover to offer travel and accommodation benefits for both the patient and a carer living in regional and rural areas who need to travel for treatment.

While this is not a mandatory requirement, it is a positive initiative, which will improve the value of private health insurance for consumers in regional and rural Australia. We will be supporting this new initiative and will be providing these benefits to our members. 

Strengthening the powers of the Private Health Insurance Ombudsman

The Private Health Insurance Ombudsman protects the interests of private health insurance consumers and helps them resolve complaints or concerns they may have with their private health insurer.

The Private Health Insurance Ombudman’s role will be expanded in  2019, strengthening its ability to protect consumers.

While the vast majority of complaints can be resolved by working together, the stronger powers of the Ombudsman will allow them to inspect and audit private health insurers to address complaints – when they cannot be resolved through the usual channels.

The Government is also providing further funding to develop the Ombudsman’s consumer website.

For more information on the reforms, visit www.health.gov.au. If you have any questions about how these changes impact your Doctors’ Health Fund policy, please call us on 1800 226 126.