Private hospitals welcome reform legislation

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The Australian Private Hospitals Association has welcomed the introduction of legislation implementing reforms to the private health insurance sector.

Health minister Greg Hunt introduced three Bills to the House of Representatives last week: Private Health Insurance Legislation Amendment Bill 2018; A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018; and, Medicare Levy Amendment (Excess Levels for Private Health Insurance Policies) Bill 2018.

The Bills give effect to reforms announced in October last year, including allowing discounts of up to 10 percent for people aged under 30, strengthening the powers of the Private Health Insurance Ombudsman, by giving it the power to inspect and audit health funds, and allowing insurers to cover travel and accommodation costs as part of a hospital product.

"Last October, I announced the most significant package of private health insurance reforms in over a decade to make private health insurance simpler and more affordable for Australians. The reforms will help strengthen the viability of the private health system by addressing concerns about affordability, complexity and lack of transparency of private health insurance," said Mr Hunt introducing the Bills.

According to APHA CEO, Mr Michael Roff,  “Allowing for age-based discounts for hospital cover should incentivise younger people to sign up to private health insurance, making the product more sustainable. The introduction of a Private Health Information Statement’ will also improve transparency for consumers on their products and any changes insurers make.”

He continued, “This is an opportunity for private health insurance companies to provide a better, higher value product to consumers. There has been some evidence of late that health insurers are reluctant to do this, but we hope to see that change.

“There remain some concerns from the private hospital sector that insurers will not meet the needs of consumers with the changes, particularly in the area of mental health. While the opportunity to instantly upgrade to take advantage of private mental health care is a positive move, we will be closely monitoring the implementation of the measure to ensure insurers don’t put artificial barriers in the way.

“Private mental health facilities treat about 40,000 Australians every year, they take enormous pressure off the public system and it is important that access to private mental health care is made available to those who need it. It’s up to private health insurers to make that happen,” he added.

Regulatory changes from 1 April mean people on basic or medium level hospital products - who have served their waiting period for limited mental health cover - can upgrade their policy and access higher benefits for included in-hospital mental health services, without serving the standard two-month waiting period. 

However, in a statement, Medibank Private said it had removed the two-month waiting period on psychology services on current extras products. 

The company's chief customer officer, David Koczkar, said the change was important for customers in need of urgent mental health support.

“In addition to improving access for in-hospital services, it means our customers will be supported more quickly with out-of-hospital psychology services and support when they need it most,” said Mr Koczkar.