Officials 'absolutely sure' reductions passed on

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The Department of Health is "absolutely sure" reductions in benefits for prostheses were passed on in the form of lower premium increases.

In response to questions at Senate Estimates yesterday, specifically how they were sure the reductions negotiated as part of reforms announced by health minister Greg Hunt last year had been passed on, Department of Health officials said insurers had "identified" and quantified the impact on premiums in their submissions for this year's 1 April increase.

"The more young people you get in the lower premiums will be," said one official in response to questions about the discount for 18-30 years olds also announced as part of last year's reforms.

They said the Department had not modeled the reform under which insurers will be able to offer premium discounts on hospital cover of up to two percent for each year that a person is aged under 30, to a maximum of 10 percent for 18 to 25-year-olds.

Officials also said "a lot of work" has been done on providing advice to health minister Greg Hunt on the reform to categorise all private health insurance policies as gold, silver or bronze. "It is not a simple task," said one official, adding they expect to provide advice to the government on the definitions of the categories by the end of July.

Private health insurers have expressed concern over the time it is taking to define the categories, with additional concern over the risk consumers could see their cover inadvertently downgraded, but officials reiterated the scheduled implementation date remains 1 April next year.

On this week's ABC Four Corners episode, Mind the Gap, which focused on out-of-pocket costs related to specialist medical fees, officials said the Department is working with stakeholders to "stamp out" booking and administration fees.

The episode highlighted examples of specialists using these fees to circumvent no-gap and known-gap arrangements. "This practice will be stamped out...because it is unacceptable," said chief medical officer Professor Brendan Murphy, who added the Department is working with stakeholders to gather data on the issue.