If 2015 was a movie, it would have had more plot twists than The Sixth Sense and The Usual Suspects combined. Last year we saw Australia's biggest insurer, Medibank, begin trading on the stock exchange, the failure of a $7 GP payment plan, and a rise in health insurance premiums.
But let's not focus on the past. 2016 is upon us, and whether you're looking to take out your first family health insurance policy or renewing your corporate health insurance, there's some interesting times ahead of us.
We may only be in the opening scenes of our 2016 film, but we can already see what's likely to feature in the following scenes. Let's look ahead at what we can expect in health insurance this year.
Premiums to rise…
As we touched upon, last year saw health insurers raise their premiums by 6.18 per cent on average, with rates rising every year to keep up with the cost of healthcare. This year will be no different, with the increases applying on April 1.
In fact, the government subsidy for health insurance could fall from 27.82 per cent to about 26 per cent in 2016, with many believing increased premiums will make up some of the difference.
If you take out or renew your policy after the April 1 deadline, you will pay the higher rate. However, by taking out health insurance for the year before this date, you can secure the current rate for the next 12 months.
… And possible surcharge hike
With premiums rising above the rate of inflation, health insurers are saying the Medicare levy surcharge will also have to rise. The surcharge is an additional tax put on those who can afford private health insurance but remain without it. The extra tax is an incentive for them to use private health insurance and free up the burdened public health system.
The government subsidy for health insurance could fall from 27.82 per cent to about 26 per cent in 2016.
However, with premiums rising consistently, health funds worry that the surcharge could soon be less than the cost of insurance. It remains to be seen what will happen here, but 2016 could be the year we get some clarity following April 1.
The continued fight against "junk policies"
Last year, Health Minister Sussan Ley came out fighting against "junk" policies, saying that the $6 billion the government provides each year for the Medicare rebate was not being spent wisely.
Policyholders are concerned that their level of cover may not be suitable for their health risks, and they could be left with holes in their policies and out-of-pocket expenses as a result.
President of the Australian Medical Association Brian Owler said much remains to be done in 2016. "There needs to be greater transparency in the sector, so that people know exactly what they are covered for when they make a significant investment in private health products," he explained in December.
With the problem out in the open, and more experts and consumers aware of the risks, we could see this important battle come closer to an end this year.
Mental health reform
Mental health under Medicare will be reformed to make it similar to the National Disability Insurance Scheme. People with mental illnesses will be assessed and provided with a suitable integrated care package.
- Those with mild disorders will have access to counselling services
- Those with moderate illnesses will have access to psychological care
- More severe cases will be treated under the Primary Health Care Network
Meanwhile, those with private health insurance policies and who need medical care for a mental illness, psychiatric treatment or drug and alcohol rehabilitation can turn to their hospital cover in most instances.
Come what may
Whatever the next 12 months brings, the team at HICA is here to help. We use our networks to compare health insurance providers, making sure that you take out a policy that matches not just your budget, but your health needs as well.
Give us a call on 1300 44 22 01 for a chat.