Health insurance challenges signal need for deeper review

Sweeping criticisms of the value of health insurance made in articles released today (Thursday 20 April) should prompt the Government to boost the scope of its private health care review, the Consumers Health Forum says.

In wide-ranging articles published by the Consumers Health Forum, consumer advocates along with a broad range of health leaders have questioned the worth of insurance for many people, particularly those with chronic illnesses.

A surgeons’ spokesman has warned that the funds’ long term viability will decline if premiums continue to rise ahead of inflation and a leading psychiatrist has questioned whether it is “morally justifiable” for funds not to provide better cover to match the needs of those with mental illness.

The comments are made in articles by 20 authors representing  consumer leaders, clinicians, health funds and analysts published in the Consumers Health Forum journal, Health Voices.  Read all the articles at:

The CEO of the Consumers Health Forum, Leanne Wells, says the widespread dissatisfaction with health insurance expressed in the articles should convince the Government of the need for a deeper more far-reaching inquiry into health insurance.

“Most of these articles are pointing to serious inadequacies whether it be in relation to the cost and complexity of insurance, the meagre coverage for many people particularly the chronically ill, or ineffectiveness of Government subsidies which are supposed to ease public hospital waiting times,” Ms Wells said.                       

 “The Consumers Health Forum has argued for the Government to use the health insurance rebate to drive reform in health insurance so that those policies which don’t meet consumer-friendly criteria in terms of transparency, simplicity and comparabililty, would forfeit the rebate.

“In her article the CEO of Private Healthcare Australia, Dr Rachel David, says the PHI reform process must deliver real change to improve affordability and value of private cover.  Dr Lawrie  Malisano of the Royal Australasian College of Surgeons also provides grounds for progress in fee restraint and more transparent performance measures.

“In his article, the chair of the Private Health Ministerial Advisory Committee, Jeff Harmer, says the Government has limited options for regulation in this area.

“CHF supports Dr Harmer in seeking opportunities for the doctors, funds and hospitals to work together in the interests of consumers” Ms Wells said.

“However given the long years of dissension on this front despite very large government subsidies, we need a more wide-ranging review and government commitment to institute measures like our proposal to use the rebate to stimulate effective action in the interests of consumers.  Policies which don’t offer simple and easy to compare policies and greater transparency about costs should not be eligible for the rebate.”

Former leading bureaucrat and business executive, John Menadue, has written in Health Voices that  health insurance is inequitable, wasteful and represents a grave threat to Medicare’s power to control health costs. “Yet inefficient and unfair private health insurance is underwritten in Australia through an enormous government subsidy.”                                               

CHOICE’s Matt Levey says health insurance has become a perfect storm for consumers. Premiums have increased an average of 54.6 per cent since 2009, well ahead of CPI.  “This toxic combination of surging prices and complexity is leading many Australians to downgrade or drop their cover completely.”

Christine Walker of the Chronic Illness Alliance whose members are most in need of ongoing care, says health insurance arrangements are tending to produce greater inequality in the health system.  The rebate, she says will become largely wasted.

Michael Roff of the Australian Private Hospital Association says that often private hospital staff are placed in the unfortunate position of having to tell patients that their insurance does not cover the procedure they are booked for.

Ms Wells said Australia needs to rethink the funding of private health when premiums had in effect become in the words of analyst Ian McAuley “a high cost privatised tax” which failed to deliver value and certainty for consumers.

See all the articles in Health Voices at:


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Mark Metherell
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