The Private Health Insurance Ombudsman (PHIO) has published her annual State of the Health Funds Report, providing information on the comparative performance and service delivery of private health insurance funds in Australia for the period from 1 July 2011 – 30 June 2012.

In 2011-12, the issues that caused higher levels of complaints to PHIO were oral information (advice given to members in retail branches or over the telephone); restrictions and exclusions on hospital policies and pre-existing condition waiting periods. There was a decline in complaints about payment delays, premium increases and fund rule changes.

Regulatory data about the funds is contained in PHIAC’s Annual Report on Operations for 2011-2012

The Fairer Private Health Insurance Incentives Act 2012 and its associated Acts have been given Royal Assent.

The Acts reduce from 1 July 2012 the amount of private health insurance rebate an eligible person with a complying private health insurance policy is entitled to when that person has income for surcharge purposes above the relevant Medicare levy surcharge threshold.

For example, in the 2012-13 financial year, in relation to premiums and amounts in respect of premiums paid on and after 1 July 2012:
• singles and couples/families who are in tier 1 will receive a 20 per cent private health insurance rebate if they are aged up to 65 years (25 per cent if they are 65 years or over, and 30 per cent if they are aged 70 years or over);
• singles and couples/families who are in tier 2 will receive a 10 per cent private health insurance rebate if they are aged up to 65 years (15 per cent if they are 65 years or over, and 20 per cent if they are aged 70 years or over); and
• singles and couples/families who are in tier 3 will not receive any private health insurance rebate, regardless of age.

The threshold tiers for the 2012-13 financial year are expected to be:
• Tier 1 — income for surcharge purposes from $84,001 per annum to $97,000 per annum inclusive for singles, or from $168,001 per annum to $194,000 per annum inclusive for couples/families;
• Tier 2 — income for surcharge purposes from $97,001 per annum to $130,000 per annum inclusive for singles, or from $194,001 per annum to $260,000 per annum inclusive for couples/families; and
• Tier 3 — income for surcharge purposes from $130,001 and over per annum for singles, or from $260,001 and over
per annum inclusive for couples/families.

The couples/families thresholds will be double the relevant singles thresholds. For families with children, the thresholds are increased by $1,500 for each child after the first.

The Fairer Private Health Insurance Incentives Bill 2011 and 2 associated Bills have been introduced into Parliament.

If passed, the private health insurance rebate will be income tested from 1 January 2012.

The ATO has produced a useful summary table here.