What you need to know

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AN OVERHAUL of the private health insurance system will see cheaper premiums and easier access to mental healthcare introduced.

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.

Young people are being targeted as they are generally healthy and less likely to claim.

“The more young people you have in the system, the lower the average cost of premiums for everybody,” Mr Hunt told ABC TV.

Health fund membership has been falling by around 10,000 people a month because of premium rises that have overtaken the inflation rate.

Premiums have increased an average of 5.6 per cent a year since 2010, but Mr Hunt wouldn’t put a figure on how much that will fall.

“I’m working with the private health insurers to help drive down premium pressures and they have guaranteed in writing they will pass through all of the cost savings,” he said.

An agreement with makers of hip and knee prostheses and cardiac devices will also save insurers about $1 billion over the next four years.

“And that will go straight through to reduce premiums,” Mr Hunt said.

The federal Health Minister claimed it was the biggest private health insurance reform in 15 years and was just the first round.

But Labor’s health spokeswoman Catherine King said young people will only save about 70 cents a week while older Australians won’t see a dollar returned to their back pocket.

“It’s clear from this package that the Turnbull government only cares about getting as many people as possible to sign up for private health insurance — it doesn’t care about what happens when they try to use it,” she said in a statement.

Labor, however, welcomed cuts to the cost of devices on the prostheses list.

Australian Medical Association president Michael Gannon said the move wouldn’t solve the issue of affordability, but it was a step in the right direction.

“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.

“We need serious reform which addresses the simple fact that (healthcare) costs will continue to increase year on year.”

Here’s what it means for you.

Young people will get cheaper premiums

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