Latest health premium rise signals urgent need for reform

Health insurance premiums on average will rise next month by more than three times the CPI inflation rate --- making private health cover that much harder to afford for many people, the Consumers Health Forum says.

“This latest increase highlights the pressing need for fundamental reform of health insurance,” the Chief Executive Officer of the Consumers Health Forum, Leanne Wells, said.

“While we welcome the Health Minister, Sussan Ley’s, efforts to rein in premiums, it is becoming ever clearer that more effective changes have to be made.

“The Consumers Health Forum has proposed a fresh approach with our “MyCover” scheme which would drive more competition and transparency in the private health sector by requiring funds to offer comprehensive, easy to compare policies, in order to qualify for the health insurance rebate. “After 16 years of chronic premium increases, it is no longer acceptable for the industry to fall back on the argument that rising health prices are inescapable.

“We need to see more active measures to restrain premium increases. “MyCover” would help stimulate a greater focus on costs by unleashing stronger competition to stimulate health funds, private hospitals and doctors to ensure patients are getting best value for money.

“We want measures that both restrain premium increases as well as deliver better value. Lower premiums fix only half the problem if policies continue with lots of exclusions, resulting in so called 'junk policies.'

“At the moment too much of health fee-setting is complicated and difficult for consumers to compare. These difficulties are heightened given that many costly treatment decisions have to be made by patients at a time of concern about their health and anxiety about pending treatment.

A recent survey CHF conducted showed that only half of respondents were confident they understood what their policy covered and only 38 per cent of respondents expressed overall satisfaction with their policies.

“Taxpayers contribute $6 billion a year in subsidies to health insurance. It is time consumers got a better return for that measure which was meant to result in lower pressures on public hospitals.

“The expense and importance of health care should be driving more consumer-friendly policies to replace the complex and uncertain reality of current health insurance policies. In turn, providers of health care, the hospitals and the doctors, should be made more accountable to consumers considerations.

“The complicated nature of the private health care market has been demonstrated recently by the excessive pricing of prostheses in the private sector, fortunately now the target of efforts by the Minister to ensure more competitive prices.

“After years of excessive costs in that sector, we support the Minister’s actions. But much more needs to be done to ensure private insurance delivers reasonable and affordable cover,” Ms Wells said.

Read CHF's full submission to the Review on Private Health Insurance here.

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Media contact

Mark Metherell

Em.metherell@chf.org.au
T:  02 6273 5444 
M: 0429 111 986