Why is health insurance changing?

From April 2019, Medibank is implementing all of the Government’s health insurance reforms.

Written by Medibank

Medibank is rolling out all of the Australian Government’s health insurance reforms. These reforms aim to make health insurance simpler to understand and more affordable.

You might have heard about these reforms, and be wondering why the shake-up and why now? We’ve summarised some of the key reasons behind these below, alongside some of the outcomes you can expect to see, and what it means if you’re already a Medibank member.

First, a note on our health system

Australia’s health system is made up of the public and private sectors, which together deliver a range of health services to Australians. While this dual system can be confusing to navigate at times, it stands out on the global stage for its far-reaching health outcomes. When compared with 35 member countries of the Organisation for Economic Co-operation and Development (OECD), Australia boasts the fifth highest life expectancy at birth for males and the eighth highest for females, plus one of the lowest rates of smoking among people aged 15 and over.

The challenges

While it’s clear our health sector has its strengths, it’s still not perfect. Recent Medibank research shows that nearly half of patients (45%) who went to hospital in the past 12 months felt they did not receive enough support, causing unwanted stress (81%) and even contributing to compromised mental and physical health for some (58%) .

We’re also aware that the health insurance system can be confusing and tricky to navigate. This is particularly true when it comes to understanding what treatments can and can’t be claimed on your private health insurance, as well as comparing different policies and choosing which one best suits your needs. In recent times, we’ve also seen costs in the healthcare sector rising every year, which have resulted in higher health insurance premiums. This has contributed to concerns over the affordability of health insurance, and for many young and healthy Australians, prompted the question, is health insurance right for me?

So what can we expect from the changes to private health insurance?

It’s clear there’s room for improvement, which is why we are rolling out all of the Government’s health insurance reforms to give our members better health cover.

Below are some of the improvements you can expect to see if you’re a Medibank member:


Medibank believes insurance should be affordable for everyone. That’s why we’re taking up the option to offer discounts on eligible hospital cover for young adult Australians (aged between 18 and 29)^. We applied this discount automatically for eligible Medibank members on 1 April 2019. Eligible Medibank members will also have the choice to increase their excess in exchange for lower premiums.

Read more: Could a $750 excess be right for you?


We will categorise your product as Gold, Silver, Bronze, or Basic to make it easier to compare with other health insurance products. Each product classification will include the same minimum number of services, regardless of insurer, and all policies will use standard clinical definitions to describe the medical services included in your policy.

It’s worth noting that this will mean changes for current members, as existing products and services are updated to fit within the new classifications. We’ve already contacted many members about their new cover names. If your cover name hasn’t been updated yet, we’ll be in touch well beforehand to let you know your new name, and if any services are being added or removed.

It’s a good time for members to to think critically about which cover is right for them. The ultimate goal here is to enable Australians to better compare policies, understand the differences between them, and give greater certainty about what their cover does and doesn’t pay benefits towards.

Access for regional Australians

Customers living in regional Australia who need to travel for treatment, may now be able to claim a portion of their travel and accommodation costs as part of their hospital cover.

Better value, and more support when going to hospital

On top of rolling out government reforms, we’re listening to your feedback and actively making changes to give members better health cover. We know value, choice and personalised support are important, which is why we’re giving members with extras cover 100% back on two dental check-ups every year at a Members Choice Advantage Dentist* and more support for those going to hospital.

Commenting on the reforms, Chief Customer Officer David Koczkar said:

“These reforms are designed to make health insurance more affordable and easier to understand. We’re adopting all the Government’s optional reforms, on top of those mandated, because it is the right thing for customers.

Our focus is on making the transition as smooth as possible and we’ve already begun contacting customers about these changes. We’re planning to do half a million check-ins this year to ensure our customers have the information they need and are comfortable with their choice of cover.”

In a nutshell…

Australia has one of the best health systems in the world, partly because of our dual public-private approach - when patients use the private system it takes pressure off the public system.

However, in recent times, we’ve seen costs in the healthcare sector rising every year, making it harder for some Australians to purchase or maintain private health insurance.

The reforms being introduced by the Australian Government aim to make health insurance more affordable; a goal Medibank is already prioritising -- issuing its lowest average premium increase in 18 years this April, while acknowledging that any premium hike may present some challenges.

They will also make health insurance easier to understand. While the reforms may create some confusion in the short-term, they will bring long-term benefits. And the changes are a good prompt for members to consider which policy is best for their needs.

We want health insurance and the health sector to be better, for everyone.

For more details on changes to private health insurance that will take effect this April, and how these may impact you, visit our health insurance reforms hub.

1 OECD (2019), Life expectancy at birth (indicator). doi: 10.1787/27e0fc9d-en (Accessed on 03 April 2019)

* Waiting period may apply. Limited to two dental check-ups annually. Not available in all areas.

^ Excludes dependants on family memberships.

Written by Medibank

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