Private Healthcare Australia and the Alliance of Members Health funds have welcomed parliamentary backing for reforms to private health insurance.
According to PHA chief executive, Dr Rachel David, the passage of the reforms was an important day for Australia’s health care system.
The reforms include allowing premium discounts of up to 10 percent for people aged under 30, categorising all policies by level of cover as gold, silver, bronze or basic, strengthening the powers of the Private Health Insurance Ombudsman by giving it the power to inspect and audit health funds, and allowing insurers to cover travel and accommodation costs as part of a hospital product.
“Health funds have worked together with the government and private health stakeholders for more than two years to deliver this vital package of reforms. In doing so we have gone through health fund products line by line to ensure we are keeping the balance of affordability and value for money for consumers choosing private health," said Dr David.
“By supporting the Private Health Insurance Legislation Amendment Bill 2018, the Senate has contributed towards ensuring the sustainability of Australia’s highly regarded mixed private-public health system. Keeping private health sustainable ultimately benefits all Australians by keeping pressure off the public hospital system."
Members Health CEO Matthew Koce described it as a win for consumers and an unprecedented demonstration of strong bipartisan political support for the private health system.
“Health insurance plays a vital role in more than 13.5 million Australians’ lives, and making it more affordable and easier to understand for consumers has always been the top priority of our funds,” he said.
Dr David continued, “Support for the Gold, Silver, Bronze, Basic classification system will eliminate features of the system that consumers have found confusing, improve transparency and make it simpler for consumers to use their PHI. The Private Health Ministerial Advisory Committee (PHMAC) developed this system so consumers would have access to products which are both affordable and provide value for money across all life-stages.
“Other reforms such as reducing inflated medical device benefits to be more consistent with real market value have already had a positive impact on premiums and delivered benefits to consumers. Last year’s average premium increase of 3.95% was the lowest in 17 years, but necessary to ensure funds remain financially viable, meet statutory prudential requirements and most importantly, continue to provide members with access to quality health care.
“The introduction of a Lifetime Health Cover discount will help put private health cover in the reach of younger people. People aged under 30 are particularly conscious of the need for preventative dental care, treatment of sports injuries and cover for mental health problems treated in hospital. These are all things which are difficult to access without private health insurance.
“PHA supports the introduction of standard clinical terminology so consumers can compare ‘apples with apples’ and better navigate the system at the point of purchasing a health insurance policy. Upgrading the Private Health Insurance Ombudsman’s website www.privatehealth.gov.au will provide consumers with an independent source of advice about choosing an appropriate policy. The most important thing is consumers know what they are buying, and that their policy of choice is not only affordable, but meets their health and life stage needs. This is the core objective of this PHI reform package.
“More than 13.5 million Australians hold PHI and over half of those have disposable incomes under $50,000 per annum. Many of these are full pensioners and superannuants who are making considerable sacrifices to maintain their health cover. The Senate’s passing of the PHI Reform Bill will put the consumer at the centre of the private health system, by making it easier for them to choose an affordable product that provides value for money,” added Dr David.