5AA program interview with Dr Rachel David on returns to PHI members from COVID-19 surgery bans in 2020

Station: 5AA
Program: Mornings
Date: 10/6/2021
Time: 11:36 AM
Compere: Leon Byner
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


LEON BYNER: Here’s some good news about private health insurance and I’ve had it for years, and it’s one thing I value very much. But excess profits from the COVID-19 surgery ban, so in other words they couldn’t fund them because you couldn’t have the procedure. They’re going to be returned to a million members of a major Australian health fund from next month. So what’s happening is, HBF are going to give its members cash payments of up to $140 in July as it returns revenue it didn’t spend as a result of its members using fewer services due to COVID-19. The Private Healthcare CEO is Dr Rachel David.

Rachel, thanks for joining us today. Is this likely to be what many funds will do or is at this stage only HBF?

RACHEL DAVID: Look, there’s been a couple of funds that have announced they’re going to go down the same path. But to give a bit of background, what happened last year is APRA, or the regulator of the health funds, asked the funds to put aside a certain amount of money to pay for claims for surgery that had been postponed but not cancelled as a result of the lockdown. Why they had to do that was because you can’t forecast premiums accurately if you’ve got massive fluctuations in claims. So you can’t keep adjusting claims every time there’s a lockdown or there’s a big spike in catch up. So you can’t keep adjusting the premium on that basis. So the money was put aside and the funds have used it for different things. The first thing that was done was some funds suspended or even cancelled their premium increases that were planned for that year and some actually permitted- helped out people in financial distress in the first half of 2020. Since that time, funds have been monitoring how and in what- you know, and how much money they can pay back from that amount and how they’ll do it. So some of it has been spent already on catch up surgery and then the rest, which will be monitored over the next 18 to 24 months, will be paid back in some way. So whether that’s in the next premium round, whether it is in a cash back, as has been done by HBF and- or, whether it’s in some other value-added(*) service, that’s been left up to the funds to do. But it’s not something that every, depending on the circumstances in each state, they need to consider how they do that and over what timeframe.
LEON BYNER: How are membership’s going numerically because I know that if you can afford private health, God forbid if you can’t. But there are many who can’t. But gee, to be able to go into a hospital and get the procedure and just have to sign a form and then dot a little box is a hell of a relief that you don’t have to worry about cost. So what’s the membership like? Are we finding that people are sticking with the funds?
RACHEL DAVID: Yeah look, they are. After five years of decline, the last 18 to 24 months have shown that our membership has stabilised and even grown a little bit. And that’s down to the fact that people are, as a result of the pandemic, are prioritising their health in the financial decisions they’re making about health even more. But perhaps even greater, an even greater issue is that the public sector has not, in many states, has not been able to catch up with the elective surgery that was cancelled last year. So we’re seeing very, very long waiting lists and ambulance ramping occurring in a number of hospitals because of scheduling issues and so forth. So, the public system is not – as a result of the pandemic, its doing best, but it’s not been able to absorb the demand for elective surgery in the way that it has in the past.
LEON BYNER: Look, I want to thank you for coming on, Rachel. What you’re telling me, in a sense doesn’t surprise me, but gee if you can- if you can afford private health. Look, the last thing you need if you’re sick and you go into hospital is either – I’m sorry, we can’t do you because we’re run off our feet or there’s a massive wait. Whereas, if you’re fortunate enough to be able to have private health, you don’t have to worry about that. You just get the procedure done. And in general terms, there’s not too many bills. I know that if you go into emergency – now this is something that people have mentioned to me, that even if you’re privately insured, you go into an emergency private hospital, often you won’t get covered by your health fund. Well, they’re not allowed to. They’re not allowed to. Now you’ll get a Medicare rebate, but there’s still going to be an out of pocket. But once you get in, if you need surgery, then it’s wonderful to have that peace of mind, if you’ve got the resources to do so. I know a lot of people prioritise it and good luck to them.
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