Accessible and Affordable Health Insurance

09 Jun 2016Media Releases

Private Healthcare Australia is committed to working with the incoming Federal Government and industry stakeholders to ensure a sustainable and affordable health insurance system on behalf of all Australians. Improved transparency, accountability and competitiveness across the whole private health supply chain is critical to the sustainability of the sector.

“PHA health funds have agreed to make a considerable investment in ways to help consumers choose and use their health insurance, and maintain an affordable private health system,” said PHA Chief Executive Dr Rachel David.

“We anticipate this work will feed into the Private Health Insurance Review implementation process in the immediate future,” she said.

Australian health funds also acknowledge the comments made in the press today by PHI Review Chairman Graeme Samuel in relation to profitability and premium increases. PHA has given cautious support to a pathway to premium pricing deregulation, but urges caution in reacting to measures of return on capital, which are short-term, and possibly not reflecting the overall sustainability of the sector.

“The yearly cycle of premium setting is already heavily regulated, and is taken very seriously by health funds which invest months of actuarial work in the process,” Dr David said.

“Over-pricing is a disaster for health funds who cannot afford to lose members.

“Over-interpreting profitability in the short-term is dangerous, as this could reflect a slow-down in the whole private sector manifested by reduced hospital admissions. This may reflect affordability concerns for consumers, rather than the potential for windfall gains by the funds.”

The PHA Election Platform circulated today, outlines the key reforms needed to maintain a healthy balance in Australian healthcare.

  1. An incoming Government can act immediately to stop the gouging of private patients needing medical devices listed on the Commonwealth Prostheses List. Health funds will pass on, through lower premiums to members, every dollar saved through prostheses pricing reform;
  2. Regulations allowing State Governments to cost shift by charging private patients twice when they use the Medicare system should be strengthened. This unfairly shifts $1b of costs on to premiums each year;
  3. Regulation forces health funds to pay uncontracted hospitals a fee-for-service which is 85% of the average paid for contracted hospitals, regardless of the services provided. This should be reviewed to allow health funds to negotiate the best deal for members;
  4. Implement to findings of the Medicare Benefits Schedule (MBS) Review to prevent outdated and wasteful clinical care.

“These measures will go a long way towards ensuring the sustainability of the industry. Health funds will continue to introduce internal efficiencies to keep costs down and improve the transparency of the industry for the benefit of consumers,” said Dr David.

“More than 13 million Australians rely on Private Health Insurance for security and peace of mind, so they can access healthcare when and where they need it.

“The goals of long-term sustainability for private health, and affordability and transparency for consumers must be priorities for both the industry and Government. Keeping private health insurance sustainable and premiums affordable ultimately benefits all Australians by keeping pressure off the public hospital system.”

Media contact: Jen Eddy 0439 240 755