Health insurers cut cover amid reforms

Some major health insurers are axing benefits, in particular for natural therapies, in response to the government's reforms to simplify health insurance.

Some Australians with private health cover are set to receive fewer benefits as insurers make changes in response to national reforms.

But Health Minister Greg Hunt insists the reforms - which were widely called for - will make private health insurance simpler and cheaper.

Medibank, NIB and Bupa are among insurers that will be making changes in response to new categories that will come into effect in April, News Corp reports.

The government's new Gold, Silver, Bronze, Basic tiers are aimed at simplifying private health insurance and making the level of cover provided more transparent.

Private Healthcare Australia chief Rachel David said up to half of policyholders would be getting letters from insurers indicating changes are ahead.

"There will be inclusions as well as exclusions," Dr David told News Corp.

Many of the benefits being cut relate to natural therapies, with the government set to withdraw the 25 per cent tax rebate for those services.

That comes after the chief medical officer found they weren't proven to be clinically effective.

Medibank has also withdrawn some weight loss and fertility treatments, it told members in an email this week.

Mr Hunt said the government's reforms were about making sure people had appropriate cover and making it easier to compare products.

"For the first time people will know exactly what is included in their policy and allow them to decide what they do or don't want," he told AAP in a statement.

"These changes were widely called for by, and consulted upon with, consumer and medical groups."

The letters to policyholders were sent less than a month after insurers were given the go-ahead by the federal government to hike premiums by 3.25 per cent from April.

That means Australian families will pay about $2.35 a week extra, but the spike was the lowest price rise since 2001, which the government has attributed to its changes.

In its annual review of the private health insurance industry released in November, the Australian Competition and Consumer Commission found more people were downgrading or dumping their private health insurance because of rising premiums.