The ACCC says it will be monitoring the private health insurance industry to ensure it delivers on the commitment to return to members any excess gained from the limits on elective surgery during to the COVID-19 pandemic.
The competition regulator has issued its annual report (2019-20) on the private health insurance industry.
It says the industry paid out $500 million less in hospital and extras benefits in 2019-20 compared to the previous year as a result of government-imposed restrictions in response to the pandemic. The restrictions limited non-urgent elective surgery and non-urgent extras treatments (including most dental, optical and other health services).
"At the same time, average premium increases have continued to be higher than inflation and wage growth despite the fact that most insurers postponed their scheduled April 2020 premium increases for at least six months in response to the pandemic," said the ACCC, adding, "Some insurers, such as HBF and Teachers Union Health, cancelled this year’s premium increase altogether."
The regulator said health funds "say they have returned substantial sums to policyholders since the pandemic began, including ongoing relief to those suffering financial hardship."
It said insurers said they will use any excess or "profits" generated as a result of the pandemic to "discharge policyholders’ accumulated demand for non-urgent elective surgery."
“The ACCC expects insurers to act on public commitments to return any profits gained from COVID-19 to policyholders, including through hardship measures such as premium waivers and discounts, and through the timely management of any built-up demand for non-urgent elective surgery,” said ACCC deputy chair Delia Rickard said
“In preparing the next report to the Senate, the ACCC will consider the actions taken by insurers in this regard.”
Mr Rickard added, “The overall decline in the proportion of people with hospital policies in 2019-20 was possibly due in part to the economic slowdown associated with COVID-19. However, some have asserted that the pandemic also reminded Australians of the quality of Medicare and the Australian hospital system, leading them to question the value of continuing to pay for private health insurance,” Ms Rickard said.
“While it is difficult to determine the exact reason why there was a lower proportion of people with hospital cover in the year ending June 2020, there is little uncertainty about the continued downward trend, particularly among younger age groups.”