The path to simpler health insurance
The long-awaited announcement today of the gold, silver, bronze and basic classification for private health insurance products for hospital services should provide greater certainty for consumers and make it simpler to understand what they are covered for in each category.
“CHF has long argued for consumer-friendly reforms in health insurance to reduce the frustration and uncertainty so many people experience. We believe the development of these four tiers of cover offers a path to more certain and transparent arrangements,” CEO of the Consumers Health Forum, Leanne Wells said.
“As well as making it clearer what services they are covered for, it should make it easier for people to compare policies and shop around to get one that meets their needs.
‘’It is important for consumers to also understand that these classifications have minimum and standard clinical categories.
“As is the case now, people will be able to ‘top up’ these minimum requirements with additional cover for the services they want under so-called sliver and bronze plus products. Consumers should benefit from both competition and simplicity across health insurance products.
“We note that not all funds will be moving to the new system at the same time, which may cause confusion for consumers and reduce the impact of the simplification.
“We understand it is a pragmatic decision to allow a phased in implementation and note the Minister’s assurance that the great majority of policies will be ready to go by 1 April next year, however from a consumer viewpoint an all-in at one point in time would have been more beneficial.
“This is the culmination of two years’ planning, and we expect private health funds to honour their commitments in a timely manner rather than take another year to do so. Now that the categories have been publicly released consumers will want to know what it means for them and won’t want to be caught between two systems.
“It is important that communications with consumers provide clarity so that they are able to fully understand the impact that these reforms may have on the healthcare and cover that they receive. Private health funds should also be able to provide accurate and expedient answers to questions from their customers,” Leanne Wells said.
CHF will be closely monitoring and reporting on the consumer experience of the transition.
Every year when the premium increases are announced consumers are confused about the use of the average figure. The overall slight decrease in premiums that is mentioned by the Minister disguises the fact that some people will face higher premiums. CHF has highlighted this before and has advocated that the announcement of premium increases should show the range of increases rather than just the one headline figure of the average.
“We will be very disappointed if the drive to simplicity brings an erosion of choice, reduced competition and increased prices. That would do nothing to enhance the value of private health insurance to the average consumer.
“We welcome the inclusion of most pain services in the lower product tier as this will ensure access to services for many thousands of people who live with chronic pain,” Leanne Wells said.
These reforms, whilst welcome, do not address the fundamental issue around the overall value of private health insurance. CHF maintains our call for an independent inquiry into private health insurance.