A number of Federal Government reforms designed to make private health insurance simpler and more affordable will kick in from 1 April, 2019. Among these reforms are changes to travel and accommodation benefits for patients and their carers. These changes are geared towards those who live in regional and rural areas and need to travel in order to access specialised services and treatment.
What are travel and accommodation benefits?
Firstly, it might be helpful to explain what travel and accommodation benefits are. Travel benefits are when an insurer pays you money to help cover the cost of getting you to the hospital. So, for example, they may pay for or subsidise your petrol costs, bus tickets, train tickets or airfares. Accommodation benefits are designed to cover the cost of you staying at accommodation outside of the hospital, for example at a nearby hotel or motel.
Insurers will generally apply certain conditions on when travel and accommodation benefits will be covered. For example, insurers may specify that:
- The treatment must be medically necessary;
- The treatment must be unavailable at a facility nearby;
- The return trip must be at least 200 kilometres; and
- The expenses must be directly related to your treatment
What are the changes to travel and accommodation benefits?
From 1 April, 2019, insurers will have the option of offering travel and accommodation benefits under hospital cover. These benefits are currently only offered under extras cover, which is also known as general treatment cover and includes treatments outside of hospital like dental, optical and physio. According to the government, travel and accommodation benefits are currently only available to those with top level extras cover. By allowing insurers to offer these benefits under hospital cover, the government hopes regional and rural Australians will receive better value policies.
As this is an optional change, it might be a good idea to check what is offered by your insurer and what conditions may apply.
Why are these health insurance changes happening?
Australians living in regional and rural areas may need to travel long distances to receive specialised health services and treatment. However, the travel and accommodation benefits required to do so are not widely available, outside of some extras policies. The government reports that only about half of all private health insurers currently offer these benefits. It hopes that these changes will incentivise insurers to offer higher travel and accommodation benefits.
Another reason for the reforms is concern over rising premium costs. In November 2018, an ACCC report found that Australians are increasingly downgrading or dumping private health insurance altogether due to rising premium costs. In fact, according to a recently-released APRA report, private health cover is currently at an 11-year low, with only 44.6% of Australians covered with a hospital policy at the end of 2018.
Changes to travel and accommodation benefits are designed to allow insurers to better spread their risk, the government says. Ultimately, this may mean higher travel and accommodation benefits being offered by some funds, without premiums going up disproportionately for the customers who need those services..
What else is included in the health insurance reforms?
The biggest upcoming change is the introduction of new product tiers which are designed to make it easier to compare policies. Health insurers have a year from 1 April, 2019 to classify their hospital products as either Gold, Silver, Bronze or Basic.
Another important change is that insurers will be allowed to offer consumers higher excesses for hospital treatment, which the government says may lower premiums. For singles, the maximum excess limit will be increased from $500 to $750. For couples or families, it will rise from $1,000 to $1,500.
To find out more about the reform changes, click here.
Image Source: Travelling.About (Shutterstock)