$6 billion reasons to drive better deal for health consumers

It’s time consumers got a better deal out of health funds in return for the $6 billion a year health insurance subsidy, the Consumers Health Forum said today.

“The weekend call by the Health Minister, Sussan Ley, for health funds to provide more information to justify their proposed premium rises is welcome and justifiable, and highlights the need for more robust competition between funds,” the Chief Executive Officer of the Consumers Health Forum, Leanne Wells, said.

“What is needed is more incentive for real competition in health insurance and CHF believes the health insurance rebate provides an ideal tool to stimulate this.

“Competition needs to be on value, not just price. We have called on the Government to withdraw the rebate from policies which fail to provide standardised, easily comparable policies.

“As the Minister said at the weekend, the Federal Government holds a significant stake in private health given the $6 billion health insurance rebate.

“At the moment the jumble of well over 40,000 policies with numerous exclusions and small print conditions offered by the funds, makes the choice of health funds a mind-numbing process.

“Consumers find it difficult to weigh up different policies and often do not know until too late just how much their health fund will cover of their hospital and specialist bills when having private treatment.

“Try before you buy is not an option for patients undergoing surgery.

“It is time the Government deployed the rebate to simplify and improve the business of buying health insurance as well as ensure PHI policy achieves goals such as taking pressure off public hospitals. That’s why we have welcomed the Minister’s commitment to a wide review.

CHF’s submission to the PHI review and our 2016 Federal Budget submission recommends:

  • The creation of a suite of nationally standardised (or default), basic private health insurance packages for Hospital Cover (myCover). The features of these packages should be developed jointly with consumers, health insurers, doctors and private hospitals and would offer a range of services to fit different stages of the life course ;
  • Making the Rebate available only for myCover packages, and reinvesting savings back into the public system;
  • Limiting the Rebate on general cover to interventions that have a sound evidence base.

“The availability of directly comparable policies will drive competition among health funds along with greater transparency concerning charges by hospitals and doctors.

“Consumers have faced above-inflation health insurance premium increases each year for the past 15 years. The rebate was meant to lead to a reduction in public hospital waiting lists. That has not happened and it is well-past time for constructive reforms that ensure this significant taxpayer subsidy delivers benefits for all Australians and the effectiveness of the health system overall,” Ms Wells said.


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