Reform of private health insurance next step for Commonwealth after rate increase

Wednesday, March 2, 2016

The Australian Healthcare and Hospitals Association (AHHA) is anticipating the Commonwealth Government’s proposals to reform private health insurance following the approval of the latest average premium rate increase of 5.59% from 1 April.

“Health Minister Sussan Ley’s announcement that it would be easier for private health insurance customers to find a good deal is welcome, but it is essential that the Government’s process of broader reform benefits the entire community,” AHHA Acting Chief Executive Dr Linc Thurecht said.

“We note that it took a personal push from Minister Ley for resubmissions from insurers on price rises to result in an increase which sees 93% of Australia’s 13 million private health insurance customers benefiting from a lower than expected premium increase.”

The AHHA also supports Minister Ley’s review into increased transparency around health policies, targeting policies of questionable value, confusing terminology and hidden payments, as part of the Government’s reform package.

“We also note Minister Ley’s statement that the current premium approvals process does not provide the right checks and balances to ensure the best deals are passed on to consumers every year and that there are significant additional costs and barriers to achieving larger premium savings,” Dr Thurecht said.

In its submission to the Department of Health’s Private Health Insurance Consultations, the AHHA advocated for simpler products and better communication with policy holders; the removal or better targeting of the private health insurance rebate with the savings fully re‑directed into the health system; policies meeting consumer need; better business practices; and equity and accessibility assurance for the non-insured.

Any savings from the removal or scaling back of the private health insurance rebate should be redirected to public health system funding, including broadening the list of items covered by the Medicare Benefits Schedule (MBS) to support evidence based primary and sub‑acute health services.

“With multiple reviews currently underway across the health sector, responses – including any reform to private health insurance – will need to be coordinated to ensure the best outcomes for patients,” Dr Thurecht said.

“Changes to private health insurance must ensure the equity, accessibility and sustainability of the broader Australian health system to benefit the whole community.”

Read AHHA’s Private Health Insurance Consultation submission here.

Media enquiries:
Adam Vidler
Communications Officer, The Australian Healthcare and Hospitals Association
0487 783 775