Health insurance needs deep reform now

Private health insurance needs deep reform if it is to provide affordable and appropriate cover for ordinary Australians and the inquiry announced today signals a positive step towards necessary change, the Consumers Health Forum says.

“We have waited a long time for a thorough rethink of health insurance and we appreciate the determination and leadership of Health Minister, Sussan Ley, to initiate reforms,” the CEO of the Consumers Health Forum, Leanne Wells, said.

“The terms of this inquiry hopefully open the way to consumer-friendly, easier to understand policies, address regulatory obstacles and develop better options for rural Australia.

“We welcome the appointment of Dr Jeffrey Harmer as chair of the inquiry.  His experience across a range of tax and health issues make him well-suited to inquire into this complex area of health policy.

“The persistently negative revelations about the rising costs and uncertainty plaguing health insurance have culminated recently in the first decline in the membership rate for years.

“That’s despite the plethora of regulations, tax incentives and $6 billion rebate that are meant to encourage people into health cover.

“The fact is that premiums have marched upwards ever since the rebate was installed at the turn of the century.

“While rising premiums have reflected surging health costs, the Federal Government policy around health insurance over the past 17 years has failed to translate into effective protection for consumers from rising premiums and out-of-pocket costs.

“The Consumers Health Forum has published its position statement on private health insurance and will be drawing on that as participate in the Private Health Ministerial Advisory Committee.

“Our position statement makes it clear that it will be critical to balance shorter-term measures that put downward pressure on premiums with a sound, robust policy review that has a clear timetable for delivery and commitment to change.    

“The Consumers Health Forum has argued for the rebate to be better targeted in the best interests of taxpayers and consumers.  Policies that do not meet criteria of reasonable cover, simplicity and comparability should not be eligible for the rebate.

“The Minister has also announced she will revamp the Prostheses Listing Advisory Committee to scrutinise the prices of the thousands of medical devices covered by health insurance.

“The fact that many commonly-used devices cost private patients much more than they do in public hospitals is clearly a disparity that requires examination”.

“The Minister has given priority to the pricing issue. Whatever the outcome, it’s important that consumers see the benefits in the next round of premium adjustments early next year,” Ms Wells said.

CHF’s private health insurance position can be read here: PHI Position Statement 


Media contact

Jenna Gray

T:  02 6273 5444 
M: 0429 111 986