Federal independent MP Andrew Wilkie has proposed new laws that would ban private health insurers from directly providing services like dental and offering differential rebates.
Mr Wilkie plans to introduce enabling legislation - Private Health Insurance Legislation Amendment (Fairer Rules for General Treatments) Bill 2019 - in late November. However, private health insurers believe the change would lead to one thing - higher costs.
Health insurers are increasingly contracting dentists and vertically integrating with dental practices. This means they have been able to reduce uncertainty about out-of-pocket costs and even provide preventative services with no gaps.
The Australian Competition and Consumer Commission has confirmed this benefit in its annual report on private health insurance.
The insurers believe Mr Wilkie's changes would discourage their investment in preventative health programs and lead to higher long-term health costs.
It would also erode the value of private health insurance to consumers with the likely resut of forcing more people into the public system.
According to Private Healthcare Australia, "We will wait to see the full proposal, but the short title demonstrates Senator Wilkie doesn’t know how health insurance works, doesn’t know how business works, and wants to add a big tax on consumers.
"Senator Wilkie’s proposal will have unintended consequences for consumers’ out of pocket costs.
"Health funds are the major funder of dental care in this country. Health funds pay out over $2.7 billion per annum in dental benefits, which is more than Federal Government dental programs. One-in-two Australians claim for dental services through a health fund."