PHI 23/12

This circular issued by the Private Health Insurance Branch contains information about Private Health Insurance (Complying Product) Amendment Rules 2012 (No. 2)

Page last updated: 30 March 2012

Printable version of 23/12 (PDF 22 KB) and 23/12a (PDF 23 KB)

30 March 2012

Private Health Insurance (Complying Product) Amendment Rules 2012 (No. 2)

The Private Health Insurance (Complying Product) Amendment Rules 2012 (No. 2) (the Amendment Rules) were registered on the Federal Register of Legislative Instruments (FRLI) on 29 March 2012 (F2012L00720) and take effect on 1 April 2012. The Amendment Rules can be found on ComLaw using the following link:

http://www.legislation.gov.au/Details/F2012L00720

The Amendment Rules amend the Private Health Insurance (Complying Product) Rules 2010 (No. 2) (the Rules) which commenced on 14 January 2011.

The Rules prescribe the standard format and content of Standard Information Statements (SISs) and provide detailed instructions for completing the SIS templates, to ensure consistency. The SISs key information about private health insurance products must include details on premiums, waiting periods, exclusions, limitations, excesses, co-payments and gap alerts to enable easy comparison of private health insurance products from different health insurers.

The purpose of the Amendment Rules is to improve the quality of information available to consumers about private health insurance products and to make it easier for consumers to use and understand SISs.

Background
Under Division 93 of the Private Health Insurance Act 2007 (the Act), health insurers are required to make standard product information, known as a SIS, for all of their active complying health insurance products available to consumers. This requirement was included to ensure that consumers can easily compare health insurance policies and understand their entitlements under health insurance policies.

It is also a requirement under Division 96 of the Act for private health insurers to provide new and updated SISs to the Private Health Insurance Ombudsman (PHIO). PHIO publishes each SIS on its website www.privatehealth.gov.au for the public to access.

The use and effectiveness of SISs have been monitored to ensure the statements continue to meet the policy intent under which they were developed. Through the work of PHIO and feedback from stakeholders, the Department of Health and Ageing (the Department) identified issues with the SISs which prompted the Department to undertake a review of the form of the SISs in 2010-11. That review has resulted in the improvements to the form of the SISs made in the Amendment Rules.

Details
The Amendment Rules delete Schedules 1-4 of the Rules. The Amendment Rules insert updated Schedules 1-4 in the Rules.

Further details about the amendments to the SISs are provided in Attachment A.

Attachment A - Summary of changes to the permitted content of templates to Standard Information Statements (SISs) prescribed by the Private Health Insurance (Complying Product) Rules

IssueRules changeRationale for change
Sub limits and overall limitsOn the general treatment SIS, adjust the font of the words ‘Sub-limits apply’ to Bold.Ensures that consumers no longer miss the detail that sub-limits may apply to some services.
General treatment SISs for single-service policiesSingle-service policies:
On general treatment SIS, add ‘Not Available On This Product’ alongside all of the (other) services that are not covered by the policy.
Ambulance Cover:
  • Make available options for ambulance cover for hospital and general treatment SISs, as follows:

For state-specific policies:
“X” – not covered;
  • “Covered, conditions may apply, contact insurer for details”; and
  • “Ambulance covered by State Government”.
For all-state policies:
  • “Not covered (State Government cover in QLD and TAS)”; and
  • “Covered (State Government cover in QLD and TAS, other states contact insurer for details)”.
  • Enable the use of the asterisk option for ambulance cover for those products where ambulance cover can be selected from the list of services available to the consumer to choose from (‘Mix and Match’ products).
Assists consumers to clearly distinguish between single-service policies from ‘basic’ policies with a wider coverage.
  • Eliminates consumers’ confusion about current categories of “comprehensive” and “partial” that are used to describe ambulance cover under the SIS because different conditions and restrictions that insurers may apply to their ambulance policies cannot be displayed on the SIS.
  • Consumers can choose ambulance cover from the list of services available for selection when purchasing a ‘Mix and Match’ products.
Capacity of free text boxes for additional informationOn the general treatment SIS, shorten the title of the free text box from ‘Health Care Programs and other features’ to ‘Other features’.Frees up space on the general treatment SIS for other information.
Adding weight loss surgery as a permitted itemOn hospital SIS, replace 'podiatric surgery' with 'gastric banding and related services' to add a weight loss surgery option on the list of available services. See also issue ‘What is covered’.Weight loss surgery, such as gastric banding, has become more common as a treatment for obesity. Insurers need to keep their clients informed about this and other treatments affected by benefits limitations.
Benefit limitation periods (BLPs) and ‘other services’On all SISs, amend the wording for ‘What services are only covered to a limited extent’ and enable entries for BLPs for ‘other services’ without having to first choose another service that is selected from a list of available services. See also issue ‘What is covered’.Alerts consumers that BLPs may apply for some services (i.e. spinal surgery) that are not available for selection in the list of services and need therefore be listed in ‘other services’.
‘Who is covered’ field in the SISOn all SISs, add another permitted content for the ‘Who is covered’ field for ‘One adult & any dependants.Consumers can discover single parent extension policies on the website as the number for this type of product offered by insurers is on the rise.
Terminology requiring clarification and its useOn all SISs, make some minor adjustment to the terms, as described in the summary of terminology requiring clarification.Increases the ease with which consumers can use and understand the SISs.
Policies that cover a list of items and exclude or restrict everything elseOn all SISs, enable displaying “A limited number of services are covered, see below” for those policies that restrict or exclude all of the Medicare Benefits Schedule (MBS) items, except for a list of up to 10 items.Assists consumer to clearly distinguish between policies that cover a list up to 10 items and exclude (or restrict) all other items, and policies that only exclude the items that are listed on the SIS.
General treatment policies with individual lifetime limits for grouped servicesOn the general treatment SIS, show lifetime limits to be specified for individually grouped services, as they can be shown for ungrouped services, by enabling the following entry for displaying benefits limits text for policies to which this option applies:
$XXX per person
(combined limit for [a] general dental, major dental, endodontic & orthodontic)
$X,XXX lifetime limit for [b] orthodontic’

[a] – for permitted content, insurers may choose any combination of the following services: general dental, major dental, endodontic & orthodontic.
[b] – for permitted content, insurers may choose any one of the following services: general dental, major dental, endodontic & orthodontic.
Provides consumers with more accurate information on benefits limits for policies that apply lifetime limits for individually grouped services.
Non-PBS pharmaceuticalsOn the general treatment SIS, amend the reference to the benefit for non-PBS pharmaceuticals in the ‘Examples of Maximum Benefits’ column from ‘per prescription’ to ‘per eligible prescription’.Alerts that non-PBS pharmaceutical must be an eligible item so that a consumer can claim benefits.
What services are covered (on the hospital SIS)On the hospital SIS, delete the word ‘medical’ from the fields “What medical services are not covered at all?” and “What medical services are only covered to a limited extent:” See also issue 7 ‘BLPs and other services’.Helps to avoid consumers’ confusion as they may not fully understand the difference between hospital and medical benefits.
If you require further information please telephone: (02) 6289 9853/24 hr answering machine or email the enquiry to Private Health Insurance Branch

For more information visit 2012 Private Health Insurance (PHI) Circulars.

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