CHANGES AHEAD: A key change is that hospital cover must be classified as either Basic, Bronze, Silver or Gold - each with specific minimum standards of cover that apply across the industry.
CHANGES AHEAD: A key change is that hospital cover must be classified as either Basic, Bronze, Silver or Gold - each with specific minimum standards of cover that apply across the industry.

Time to review your private health

TIME is running out to get a better deal on private health insurance ahead of April 1 price hikes.

Fewer than one in two (44%) Australians have health cover, and for those that do, managing the annual increase in premiums can be difficult - more so because since 2010, the cost of private health insurance has risen by around 50%.

Late last year, the government announced that premiums will go up by an average of 3.25% from April 1. That's an 18-year low, but as always, averages don't tell the full story.

Some funds, like CUA, Defence Health, HCI and HIF will raise their premiums by over 4%. Others including Westfund, HBF and GU Health will lift their premiums by less than 2%.

This difference makes it worth shopping around to check you have cover that suits your hip pocket as well as your healthcare needs.

The current year is especially important to review health cover because a number of reforms are scheduled to take effect between now and April 1, 2020. Many funds have already put the wheels in motion.

A key change is that hospital cover must be classified as either Basic, Bronze, Silver or Gold - each with specific minimum standards of cover that apply across the industry.

As a guide, dental surgery is only covered through silver and gold policies, but if you want to be insured for something like weight loss surgery, you'll need to go with a gold policy.

The idea behind these reforms is that it will be easier to shop around and compare different policies, something that has been challenging in the past.

Under the new rules, most natural therapies like naturopathy, can no longer be covered through private health cover though some insurers may choose to pay for services like remedial massage.

In addition, funds will be able to raise their highest excess from $500 to $750, which can help to reduce ongoing premiums.

In a bid to encourage more young adults to take out health cover, age-based discounts of up to 10% will be available for 18-29 year-olds. That's fair enough as this age group typically makes fewer claims than older Australians.

It can all sound confusing even with the new reforms in place. The privatehealth.gov.au website can shed some light, letting you compare funds, and also providing links to tables showing the average premium rise for your health fund.

Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.