2020-21 Budget: Private Health Insurance Initiatives

The Federal Government’s 2020-21 budget was released earlier this week, and as expected much of it was dominated by the COVID-19 pandemic, including $25 billion in new measures in response to the health and economic effects of the pandemic. The Budget is predicated on the view that a vaccine for COVID-19 will be available before end FY21 and funds the vaccine plus testing until that time.

For healthcare, the Budget carried a few surprises and no obvious negatives.

$750 million will be put forward to support the continuation of COVID-19 testing, $170.8 million to continue the operation of up to 150 respiratory clinics, and an increase in funding to the National Hospital Funding Agreement for the next five years.

Also announced were some new measures for Private Health Insurance, with the government providing $19.5 million over four years to fund a range of initiatives to improve the accessibility and affordability for Australian consumers.

Below is a summary of the initiatives:

• Increasing the maximum age of dependants allowed under family policies from 24 years to 31 years and removing the age limit for dependants with a disability. This should assist those families with older-age students and family members with disabilities.
• Funding enhancements to the Medical Costs Finder website to include voluntary fee disclosure for specialists, to increase the transparency of out-of-pocket costs.
• Improving accessibility of home and community-based care via private health insurance, commencing with mental health and general rehabilitation services.

The Budget is framed as delivering a second wave of reform that builds on the Minister’s previous Private Health Insurance reform package. It is part of an iterative reform process and we can expect more reform to come as part of future Budgets.

The government is aiming for an implementation date of 1 April 2021 for most of the private health insurance related initiatives. However, these announcements are proposals only and will be final once passed by the Senate. Full details of any proposed changes will be provided in the coming months.