PHA CEO Dr Rachel David discusses reforms to extend PHI coverage to dependents with disabilities on Radio 2GB

Station: 2GB
Program: Breakfast
Date: 5/7/2022
Time: 8:18 AM
Compere: Ben Fordham
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


CHRIS SMITH: Rachel David is the CEO of Private Health Australia. I’ve got her on the line right now. Rachel, you’ve just heard everything that Julie had to say. You were aware what Greg Hunt had done, right? The private health insurers would have been right across this.
RACHEL DAVID: Yeah, that’s absolutely right. And at the time the legislation was going through, we were also aware of some of the complexities with it. So we were very clear that we weren’t going to set expectations at a level where we couldn’t deliver.
CHRIS SMITH: What do you mean complexities? What’s so complex about simply adding a person onto someone’s health insurance policy and adding a little bit more to the premium?
RACHEL DAVID: Look, there are a lot of other laws that the funds need to abide by which we’re still working through with the regulators…
CHRIS SMITH: [Interrupts] Like what?
RACHEL DAVID: We are- like the Lifetime Health Cover loading, which means that older people pay more for their health insurance. And we were hoping to actually, as the funds design these products, for that to be raised so that they weren’t too expensive. But we’re still working through that issue. That being said, most health funds are going to be offering these policies both to disabled people and to dependents aged up to 31 by the end of the year or in six months’ time.
CHRIS SMITH: [Interrupts] So hang on, this will happen?
RACHEL DAVID: Oh, yeah, absolutely. It’s just the- it was announced with quite a bit of fanfare before the system was ready to redesign the products and the systems and introduce the products.
CHRIS SMITH: So in Julie’s situation, why would her insurer allow Adam to be on her family policy if they can make more money by making him take out a separate policy? This is purely an impost, I guess, to the health insurer that you’re concerned about?
RACHEL DAVID: No, not really. It’s just a complex thing to redesign the products and deliver it. This, honestly, is not a money making exercise for the funds.
RACHEL DAVID: There aren’t really enough people in this situation for it to be worthwhile. And to be honest, it’s just good corporate practice to be able to…
CHRIS SMITH: [Interrupts] Yeah, do you think there’s a willingness amongst the industry, amongst those private health insurers, the main ones in particular, to get on board with this if the government takes it to the next step?
RACHEL DAVID: Yes, I do. And look, to be honest, I am sorry that it has taken so long. All I can say is that the system is complex and we’re trying to- and the funds are trying to actually design products that are both affordable and easy to understand in the context of all the other rules they have to abide by.
CHRIS SMITH: Okay, so what has to be done here? Does it have to be mandated by the new federal government, or will the industry itself start bringing in these new products within the next six months? What’s the next step?
RACHEL DAVID: Well, the industry is already working on designing the products and introducing them, so I don’t think that any further action by the federal government is really warranted at this stage. I think by the end of this year there should be a number of funds which have product in the market.
CHRIS SMITH: So if I spoke to you, say, on 5 December in six months’ time, you might be able to tell me that the private health insurance industry is ready to support people like Adam?
RACHEL DAVID: Yeah, that’s right. And I think we’ll have a better idea about which funds and which products at that particular point. You’re absolutely correct. The policy was not made mandatory at the time that it went through the Senate. But I think that a sufficient number of funds are prepared to step up and actually enter the market with these products so that that’s not necessary.
CHRIS SMITH: Okay. Dr Rachel David, thank you very much for your time.
RACHEL DAVID: Thanks, Chris.
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