Members Health says the latest statistical update from the prudential regulator shows private health insurers paid out more in benefits in the March quarter but suffered a hit to premium revenue while the medical device industry has called on the sector to cancel the already deferred premium increases.
The update from the Australian Prudential Regulation Authority (APRA) has revealed the impact of the COVID-19 pandemic on the health insurance sector for the three months from April to June.
The report showed a 1.4 per cent reduction in premium revenue but a 2 per cent increase in claims. Management expenses also increased to 15.8 per cent but there was an overall 0.4 per cent decline in net margin - the lowest in at least the last 12 years.
“The data is proof that health insurers are still making sure members get access to the highest quality care,” said Members Health CEO Matthew Koce.
“They also prove beyond any doubt that allegations of ‘windfall profits’ during the COVID-19 pandemic are blatantly misplaced.
“Australia’s health insurance industry has gone above and beyond during the pandemic, deferring premiums, providing massive and unprecedented hardship support packages, and innovating faster than ever before with telehealth services and virtual consultations.”
Members Health said the update shows hospital and general treatment episodes both fell during the June quarter, while participation declined.
Mr Koce said government intervention designed to contain the spread of COVID-19 has clearly had an impact on the quarterly results.
“But in most States across the country, private hospitals and surgeons are working hard to make up delays to surgery and treatment caused by those restrictions,” he said.
Mr Koce said declines in private health insurance membership were concerning, not only for the private health system but also for the public system.
“Australia’s health care system relies on a crucial balance between public and private. Because of the COVID-19 restrictions, waiting lists for public elective surgeries are tipped to blow out to more than two years for some surgical specialities.
“Private hospitals beds are likely to become even more sought after as public hospital waiting lists grow. Even before COVID-19, wait times in public hospitals ran beyond a year for some surgeries.”
Mr Koce said Members Health is urging the Government to "address entrenched cost drivers" in the private system.
“That includes tackling high medical devices costs while also supporting the private health insurance rebate to make sure it does not fall any lower than 25 per cent due to CPI indexing and is transitioned back to the full 30 per cent,” he said.
However, the Medical Technology Association of Australia said the APRA update "once again" showed the savings that have been delivered by its agreement with the federal government.
CEO Ian Burgess said private health insurers should reverse their deferred premium increases and return profits to their customers.
“As MedTech innovators, doctors, nurses and essential works have pulled together to reduce costs and support the Government’s fight against COVID-19, struggling Australian families are rightly asking why private health profiteers are still raking in windfall profits at the expense of everyone else,” said Mr Burgess.
“If private health insurers in Ireland, and even car insurers in Australia, can return premiums to their customers in this time of national unity, why can’t these private health profiteers give back some of their windfall profits to struggling Australian families? Why can’t they put people before profits?”