Health insurers welcome 'more sensible' reform suggestions

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Private Healthcare Australia says it welcomes some of the "more sensible suggestions" proposed by the AMA in its new report on private health insurance.

The AMA has proposed restoration of the Private Health Insurance Rebate. The value of the rebate, which was once 30 per cent of premium, has steadily declined over the past decade due to a series of reforms.

The AMA has also proposed changes to the Lifetime Health Cover Loading, suggesting the government lift the current age cut-off from 30 to 35, and consider allowing further discounts for younger Australians.

It has also proposed regulating the amount of premium revenue insurers return in the form of benefits - at 90 per cent - and an entirely new body to regulate the sector.

Private Healthcare Australia said affordability remains the major issue for private health insurance. The association said, in the current environment, "the only way to contain rising premiums is to remove wasteful costs and inappropriate red tape from the system."

It called for reform of the pricing of medical devices, including the adoption of a national procurement system, and the removal of barriers to health funds paying for our of hospital care.

"This would prevent unnecessary admissions to hospital and care in the community is an appropriate setting for many patients," it said, adding a 100 basis point increase in the Medicare Levy Surcharge would encourage more higher-income Australians into private cover.