If you're one of the 13.5 million Australians who have private health insurance, you should expect an increase in your premiums on April 1. Also, there are some key reforms planned, such as classifying private hospital cover into 4 easy-to-understand tiers. And you’ll no longer be able to claim health insurance on some alternative therapies.

Here’s what you need to know.

How much will health insurance premiums go up?

Health insurance premiums increase every year on April 1, and this year they will rise, on average, by 3.25%. (In other words, some health insurers will raise their premiums by more, and others by less.)

Following the increase, a family will pay around $2.35 extra a week on average, while for a single person the increase will be around $1.14 on average.

Although this increase is the lowest in 18 years, it's still a good time to shop around for the best deal on health insurance.

What else is changing?

This year also sees the introduction of new reforms to private health insurance. Here are some of them:

• All health insurers will need to classify their private hospital cover into 4 tiers (or, categories) — Gold, Silver, Bronze and Basic. The services are included in these tiers will be based on a new minimum standard, making it easier for you to compare and choose the hospital cover offered by different insurance companies.


• From April 1, you will not be able to claim the cost of some natural therapies, including Pilates, naturopathy, homeopathy and yoga. For the full list, visit Health.gov.au.


• You will be able to choose higher excesses (the amount you pay when you make a claim) in exchange for lower premiums (what you pay in instalments when you take out private health insurance).


• People aged 18 to 29 may be offered a discount on their private hospital insurance premiums of up to 10%.


• Insurers will now be able to offer cover for some travel and accommodation for Australians living in regional and rural areas who need to travel to receive hospital treatment.


• It will be easier for insurance policy holders to access mental health services and drug and alcohol treatment in hospital.

Some of these reforms have already been introduced and private health insurers have until April 1, 2020, to classify their hospital policies into tiers.

To find out more about these reforms, visit the Department of Health.

Top tips for avoiding health insurance problems

Here are 5 ways to keep on top of your health insurance, according to the Commonwealth Ombudsman.

• Review your cover regularly. Remember that you can usually switch funds at any time with no waiting period if you’re taking on the same level of cover. If you change funds, make sure you understand the new product. Read all the documents the new insurer gives you, and if there’s anything you don’t understand, call them.
  
  

  If you need help making the switch, there is a range of health insurance comparison sites online, including Privatehealth.gov.au

• Do read written information from your insurer. You will be notified of changes to your cover, so make sure you read and understand any information you’re sent.


• Let your fund know of changes to your circumstances. For example, where you live or changes to your family circumstances.


• Get an estimate of fees before a consultation. Ask your doctor about how much appointments cost, including what is or isn’t typically covered by health insurance. Likewise, before you go to hospital for treatment, ask what is covered by your fund and if you will need to make any out-of-pocket payments.


• Know the limits for benefits. Ask your fund about the maximum number of payments for each kind of treatment; some funds have annual limits. There may also be a time limit for the payment of some benefits; check with your fund to see if there’s a deadline for making claims.

A word on Medicare

Private health insurance can be prohibitively expensive for some people. Luckily, all Australians are automatically covered by public health insurance through the Medicare system. But understanding how the system works can be complicated. Learn more about Medicare here.