The medical device sector says the government's move to categorise private health insurance policies is not going to achieve what it is designed to deliver.
Health minister Greg Hunt announced all policies would be categorised as gold, silver, bronze or basic as part of reforms announced last October.
The goal of the categorisation is to simplify product choice and provide clarity for consumers.
Its scheduled implementation is 1 April next year with the 'minimum requirements' for each category of cover meant to be already finalised.
The Department of Health has developed its proposed approach to the 'minimum requirements' with the help of Deloitte Actuaries and Consultants. It is also working in consultation with industry and the Private Health Ministerial Advisory Committee.
Yet according to CEO of the Medical Technology Association of Australia, Ian Burgess, the changes could effectively downgrade the policies of thousands of consumers by imposing new exclusions on existing policies.
"Our current understanding is that joint analysis and cataract removal are likely to be included in 'gold' level policies only. This means a large number of people could be forced to upgrade their cover meaning the effect of the categorisation is to downgrade current policies.
"The risk is that the reform does not simplify consumer choice at all. There could be a real hit to the value of private health insurance, a loss of consumers from the sector, and more pressure on the public health system."
Private health insurers have also expressed concern over the categorisations with any downward pressure on premiums delivered by categorising policy-holders into lower levels of cover.