PHA: Health insurers have returned over half a billion dollars

Latest News

Private Healthcare Australia has dismissed claims health insurers have profited from restrictions on access to health services during the COVID-19 pandemic.

The association was responding to reports claiming insurers had saved $1 billion during the pandemic as a result of the now lifted ban on elective surgery and restrictions on access to ancillary services such as dental and optical.

However, Private Healthcare Australia chief executive Dr Rachel David dismissed the claim highlighting the fact insurers had returned over half a billion dollars to members.

Dr David said insurers postponed the approved 1 April premium increase, adopted financial hardship provisions and funded telehealth services.

She said, "Some funds have also provided members with cash backs, rollover of services to the next calendar year and cancelled the October 1 premium increase. If the independent regulator’s claims data, due to be released in a few months’ time, shows more savings need to be returned to members, health funds will do so."

"Health funds have repeatedly and publicly said they will not profit from the COVID-19 restrictions, and are not hiding a pot of gold," said Dr David.

"Health funds made some savings over the six-week period in which elective surgeries were cancelled and some allied health providers were closed. Over half a billion dollars of these savings have already been returned to members."

Dr David said elective surgeries were postponed, not cancelled, with members still needing joint replacements, cataracts and endometriosis surgery

"Dental and allied health appointments have now returned to normal levels. Health funds are now using the remaining savings to fund the backlog of elective surgery," she said, adding the prudential regulator made it clear to health insurers they must retain enough capital to fund this backlog.

"The value of private health insurance has never been greater. With private cover, members have access to timely care with a fully trained doctor responsible for their care

"This compares to the public system where wait times for common elective procedures are blowing out to more than two years as a result of the pandemic. Allied health services have returned to normal and some, including dental and optical, are operating at service levels above pre-COVID levels, to clear the six-week backlog."

Dr David added, "Premiums rise because funds are paying for more healthcare. The COVID-19 situation has not stopped health inflation rising at levels far above general inflation.

"Health funds don’t want to increase premiums by a single dollar, but it is necessary to ensure health funds remain financially viable, meet statutory prudential requirements and most importantly, continue to be in a position to provide members with access to quality and timely healthcare."