PHA CEO Dr Rachel David talks to 5AA’s Leon Byner about health funds returning COVID savings to members via premium deferrals and cash backs

Station: 5AA
Program: Mornings
Date: 26/7/2022
Time: 9:21 AM
Compere: Leon Byner
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


LEON BYNER: This story is one that I have to say I’m surprised at the reason why we’re actually going to talk to Dr Rachel David from Private Healthcare Australia, because it seems that many people who have private health are actually under using it. Have you got private health? Use it a lot? Or is it just there as a kind of a fire hydrant sort of thing? 8223-0000. So, let’s talk to somebody who knows all about it, because Bupa, they’ve become the last major health fund to delay their premiums until 1 November. So, let’s talk to the Private Healthcare Australia, Dr Rachel David. Rachel, what’s the reason that Bupa have done this? And good morning.
RACHEL DAVID: Morning, Leon. Look, it does seem strange that health funds are doing this and some are even giving cash back to their members at the moment. But it comes down to a promise that health funds made to their members early in the pandemic, and that is that they would not accumulate any profits as a consequence of the COVID-19 pandemic and some of the lockdowns. So what occurred is during the last two and a half years, a lot of people have been unable to use their extras cover in particular, but also there’s been delays in hospital admissions. So that’s meant that some cash is accumulated in the health funds because they haven’t been paying those claims. And so to make good on that promise, they’ve given it back to members in terms of either delaying planned premium increases or, in some cases, handing cash back to their members. So in all it’s about $2 billion that’s been paid back already…
LEON BYNER: Two billion?
RACHEL DAVID: …yes, across all of our major funds, and in fact across all of the health funds. The other aspect is that with hospital cover, because of the delay in some of the surgeries that were planned during this period, the funds have put aside a special pool of money to pay those claims when they come back. And if they don’t come back, if those people for any reason don’t rebook their surgery, then those funds will be paid back as well.
LEON BYNER: Now look, I know there was a discussion in your industry about the fact that there seemed to be a lack of younger people investing in private health, which was making things a little difficult. Has that changed?
RACHEL DAVID: Well, look, not really. It’s always going to be a big step for younger people to make the kind of investment in private health that older people who might need it very quickly do. But we have seen a group of younger people aged 20 to 25 take it out – whether its subsidised by their parents or not, I don’t know…
RACHEL DAVID: …and the reason is the need to access mental health services. And that has actually driven a particular group of young people into private health insurance over the last two or three years.
LEON BYNER: A lot of people may not know that indeed, having a policy helps you pay for that kind of consultation, because it’s often assumed that these are purely physical medical things when in fact they’re not.
RACHEL DAVID: Well, that’s right. And I think one thing that people might not know is that the majority of in-hospital mental healthcare is actually provided in the private sector, whether that be for a diagnosed mental health condition or people that want- that are- have become addicted to a particular substance, be that drugs or alcohol, and they have decided to withdraw and need support. Those services are predominantly provided in the private sector, and for a number of people they’ve come to realise that only the most urgent issues where people are a danger to themselves and others are treated for any length of time in a public hospital.
LEON BYNER: Now look, tell me about the COVID-19 support, which includes a cashback of 155 million, which I understand is going to be returned to customers from October. How does that work?
RACHEL DAVID: Well, look, for most people that will just simply- anyone who’s got a bank account and has registered that with their health fund to make and pay premiums or make claims, it will just simply be deposited into their bank account. And the health fund will notify you by email or text that that is going to occur. But if anyone is concerned or feels that they might’ve inadvertently missed out, they should contact their own health fund and ask what they’re doing to pay back any accumulated pandemic funds.
LEON BYNER: When you shop around, let’s say you’re investigating either the deal you’ve got now or you’re a new customer and you’re investigating cost. Is there much of a difference in premium charges from one fund to another, or is it all pretty much the same?
RACHEL DAVID: Well, look, one- the previous government brought in a system called Gold, Silver, Bronze, Basic, which tiers the type of health insurance cover into those metallic colours so that people have an idea about how much they’re buying. Now, an effect of that system has meant that the prices are more standardised across the sector, but there are some subtle differences in what the funds provide, including what’s covered under each tier. So, it is worth investigating, particularly if you have a particular condition that you’re concerned about or that you think you might need treatment for. It is in your interest to investigate that. So, I always recommend going to the government’s comparative website because it’s completely independent and it includes all funds on there, and that should be the first port of call. That’s called and that is the most unbiased source of information. And then following that, it’s usually a good idea to ring the particular fund that you’re thinking of joining as well, just to get an idea directly from them about what they cover in the different tiers.
LEON BYNER: Which demographic would be the ones using your industry covers the most?
RACHEL DAVID: Really for the most part it’s people aged over 50, and that is because the industry pays for the majority of elective surgery, and that’s your joint replacements, your lens replacement for cataracts. And as people get older into the more frail-aged category, a lot of cardiac procedures as well for heart procedures. But that’s not to say that younger people don’t need and use it. I did mention that mental health services in terms of inpatients and hospitals provided for the most part in the private sector, and also as people near reproductive age, a number of reproductive health services are provided in private as well. And many people, because of the quality and the privacy, tend to use private for those as well.
LEON BYNER: Rachel, it’s been a pleasure talking with you. That’s the Chief Executive of Private Healthcare Australia.
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