Private health insurers use pre-Budget submission to restate call for 'urgent reform'

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Private Healthcare Australia has used its 2022-23 pre-Budget submission to restate its call for a range of reforms, including how consumer input is considered in policy development.

CEO Dr Rachel David said the pandemic has demonstrated the value of Australia’s mixed public and private health system.

“Private health insurance is a vital component of Australia’s Medicare ecosystem. Throughout the pandemic, private health care has provided surge capacity for hospitals, ensured many Australians receive much-needed surgery and provided information and support for families.

“Unfortunately, the uncertainty surrounding COVID-19 has led to record public hospital waiting lists for surgery, and reform to keep our world-class health system affordable is now more urgent than ever,” said Dr David.

She said the association's proposed reforms would help address the impact of costs on the sustainability of private health insurance.

“Research repeatedly shows that affordability is top of mind among consumers. Cost of living pressures are significant for many Australians and have been exacerbated by the pandemic.

“Health funds are committed to easing cost of living pressures on families and have delivered the lowest premium increase (2.7%) in 21 years – with some funds freezing premiums for a further period due to the impacts of COVID-19.

“While the cost of private health care is growing at a much lower rate than the public sector - Commonwealth funded programs such as public hospital contributions (up 6.5%), the Medicare Benefits Schedule (up 11.3%) and the Pharmaceutical Benefits Schedule (up 9.5%) – there are several threats to private health insurance that must be addressed to ensure the long-run sustainability of Australia’s mixed health care system.”

In its submission, Private Healthcare Australia calls for the progression of already announced reforms to the pricing of medical devices.

It says Australians should not be paying significantly more than other countries.

"As part of medical device pricing reform, introduce transparent, robust and effective national procurement processes to ensure affordable access to essential items like rapid antigen tests and personal protective equipment (PPE)," it says.

The association also calls for the restoration of the 30 per cent private insurance rebate for low- and middle-income earners, a reduction in red tape, changes to fringe benefits tax taxation arrangements and a review into how consumers input to private health insurance policy.

The association argues the "current model for seeking consumer input to health policy decisions does not accord with community values."

It says, "Professional consumer advocates generally focus on the public health system, having come from a history of welfare-based organisations. Furthermore, reliance on disease-based consumer organisations to provide policy input biases the outcomes in favour of interventions for the very sick, where the majority of health consumers do not identify as sick, but are investing in maintaining their health through different life stages such as childbirth and ageing."

It calls for a "more balanced approach to health policy."

"A citizens’ jury - including people not generally involved in health policy - should be established to provide another avenue of advice to government, industry and community on private health care policy," it says.