The federal government says its changes to private health insurance announced today will lower premiums for everyone.
Health Minister Greg Hunt on Friday will announce a major shake-up of the system, with those under 30 expected to be the biggest beneficiaries.
"The challenge now is to clearly define and describe the insurance products on offer so that families and individuals - many of whom are facing considerable cost of living and housing affordability pressures - have the confidence that their investment in private health delivers the cover they are promised and expect when they are sick or injured".
The government will also take alternative therapies like homeopathy and yoga off the list of items covered, while the waiting period for mental health services will be scrapped.
Mr Hunt believes the move will encourage young people to take up private health insurance while helping other policyholders.
Young Australians are being targeted in the biggest overhaul of private health insurance in decades, with premium discounts on the cards and a big focus on mental health.
Prime Minister Malcolm Turnbull says the package of measures will benefit all Australians and make comparing policies easier.
Australians under 30 will have their premiums cut by up to 10 per cent under federal government reforms.
One of the biggest savings in the package is an agreement with prostheses and medical device-makers to cut costs by $1bn a year in return for faster listing of devices for access to the market.
The ABC reports that insurance premiums have increased by an average 5.6 percent a year since 2010.
There will also be the option for people to increase their excess - $750 for singles and $1500 for families - in exchange for lower premiums. "We will pass on in full the savings from lower prostheses prices to our customers, which will help to keep downward pressure on premiums", said Medibank Private chief executive Craig Drummond.
"That means people will have clear choices and clear explanations in a way that has never been the case", Hunt said. By the age of 40, people could be paying an extra 20 per cent in premiums if they decide to take out cover!
Health insurance products will be categorised into four levels of cover - Gold, Silver, Bronze and Basic - to help consumers understand what types of services their insurance buys.
Benefits will not be available for a range of natural therapies, including aromatherapy, herbalism, homoeopathy, kinesiology, naturopathy, pilates, reflexology, shiatsu, tai chi, and yoga.
It will work in the inverse to the lifetime health cover (LHC) loading, which levies a 2% increase on premiums for those who don't have private hospital cover by the July following their 31st birthday.
The role of the Private Health Insurance Ombudsman will be expanded and strengthened, allowing it to conduct inspections and audits of private health insurers to ensure they are meeting regulatory obligations.
'The biggest problem in the affordability of private health insurance is the amount that's going into the pockets of the for-profit insurers, ' he told ABC radio.
She said of the 13.5 million Australians with private health insurance, "almost half of them" had an annual income of less than $50,000.
'We need serious reform which addresses the simple fact that [healthcare] costs will continue to increase year on year'.
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