The Medical Technology Association of Australia says it has written to assistant treasurer Stephen Jones calling on him to instruct regulators to investigate the health insurance sector over their practices during the pandemic and to ensure that all savings generated through reform of the Prostheses List are returned to policyholders.
“During a period of such economic uncertainty, it’s time for the corporate insurance industry to be held accountable for the money they’ve taken from policyholders – it’s time for people, not profits to be put at the centre of policy and decision-making,” said CEO Ian Burgess.
Mr Burgess said a recent report suggested that health insurers have been increasingly spending premium revenue on management fees, overheads, dividends and executive compensations.
Mr Burgess said scheduled surgeries in private hospitals were put on hold between 2020 and 2022, leaving Australian families with private health insurance unable to use it.
“We saw over the duration of the pandemic, corporate health insurers, with limited exception other than short-term deferrals of premium increases, refuse to return the benefits to policyholders,” said Mr Burgess.
“Over the last two years, the amount corporate health insurers withheld totals more than $1.8 billion of policyholders’ money. Rather than return those funds, insurers will convert them into either profits or additional capital - directly profiting from the pandemic at the cost of Australian families struggling with the devastating impacts of the cost-of-living crisis.”
The MTAA said management expenses for the private health insurance sector rose by $389 million during the period of the pandemic.
It said the medical device sector has already delivered more than $1.6 billion of savings to health insurers since 2017, through lower medical device prices, and has committed an additional $900 million over the period of 2022-2025.
It said that data from the prudential regulator has shown that health insurers are now spending more on management expenses than they are on medical devices.
“During a period of such economic uncertainty, it’s time for the corporate insurance industry to be held accountable for the money they’ve taken from policyholders – it’s time for people, not profits to be put at the centre of policy and decision-making,” he said.