Private health insurance can seem incredibly overwhelming with their being so many different options available.
And over the years, no one gets exposed to their dealings more than doctors, which is why a new report has been released with doctors naming and shaming the good, the bad and the ugly in private health.
The Australia Medical Association report showed that despite the increase in customer complaints and policy exclusions, most of the major funds have increased profits.
AMA President, Dr Michael Gannon, warned that changes being pursued by Australia’s biggest private health insurers will reduce patient choice of doctor and hospital, and leave policy holders questioning the value of their significant investment in private health insurance.
“The big insurers are pursuing a US-style managed care agenda to save costs and further increase profits by making it harder for patients to receive care from the doctor they want in the most appropriate hospital for their condition,” Dr Gannon said.
“Public confidence in private health insurance is already at an all-time low. These changes will further devalue policies, which are a major financial burden for Australian families, and will place dangerous pressure on the already stressed public hospital system.”
The new report provides an overview of how private health insurance should work to benefit patients, and explains how proposed new arrangements will result in less choice and value for policy holders.
Dr Gannon explained that such a report shows that there are a lot of policies on offer that provide significantly varying levels of benefits, cover, and gaps.
“There are also a lot of policies on the market that will not provide the cover that consumers expect when they need it,” Dr Gannon said.
“If people have one of these ‘junk policies’, they should consider carefully what cover they really need.”
“The Government has undertaken some important reforms to private health insurance to help people understand the different conditions that each policy category – gold, silver, bronze, and basic – will cover.”
“The funds must not be allowed to sabotage these reforms.”
Like any other industry, there are some insurers perform well overall, and some only perform well under certain conditions.
Customers made nearly 6000 complaints to the Private Health Insurance Ombudsman in 2016-17 – a 30 per cent increase on the previous year and the highest number of complaints in a decade.
The report shows that the same doctor performing the same procedure can be paid significantly different rates by each fund – something that is often untold behind patient out of pocket costs, despite there being high levels of no gap and known gap billing statistics.
The latest APRA statistics show an overall no gap rate of 88.1 per cent and a known gap rate of 7.3 per cent.
Dr Gannon said the medical profession is working hard to ensure patients receive value for money.
“The AMA Report Card provides patients and consumers with easily understood information about the private health insurance industry and how it works, which will help them make informed decisions when buying a policy,” Dr Gannon said.
“We explain what insurance may cover, what the Medicare Benefits Schedule (MBS) covers, and what an out-of-pocket fee may be under different scenarios. “
“We also highlight the frustrating fact that what an insurer pays can vary from State to State – even within the same fund.”
“To help consumers better understand what they are buying, we set out the percentage of hospital charges covered by State and insurer, and the percentage of services with no gap, State by State.”
“There is also a breakdown of the complaints received by provider and organisation, which shows that the number of private insurance complaints are significant, and on the rise.”
Legislation to make private health insurance simpler and more affordable
Today, the Minister for Health, Greg Hunt a legislation to deliver a wide ranging package of reforms to make private health insurance simpler and more affordable.
“We know that every dollar matters to Australian families and these reforms will get better value for families and make policies easier to understand,” said Mr Hunt.
“Already, our package of real reforms has delivered the lowest annual premium change in 17 years. At 3.95 per cent, it’s far lower than every year under the Rudd and Gillard governments.”
“But we must continue to drive better value policies for every Australian. Private health insurance is an essential and valuable part of the Australia’s health system.”
From April 1st, those with hospital insurance that does not offer full cover for mental health treatment will be able to upgrade their cover and access mental health services without a waiting period on a one-off basis.
This will significantly enhance the value of private health insurance.
Until now, as a result of having either a basic or medium private hospital cover, many patients needing urgent access to mental health services have had restricted access and faced possible large out–of–pocket hospital expenses.
Currently, if patients take the option of upgrading their policy, they have been subject to a two month waiting period – time many patients can’t afford to wait. This will now change and it will be available straight away.
“We are encouraging younger Australians to take up private health insurance by allowing insurers to discount hospital insurance premiums for 18 to 29 year olds by up to 10 per cent,” says Mr Hunt.
“The discount will phase out after people turn 40. This is a key element of the legislation introduced today.”
“The reforms brought before Parliament today also include more support for Australians in regional and rural areas, allowing insurers to offer travel and accommodation benefits for people in regional and rural areas that need to travel for treatment.”
Consumers will also be able to voluntarily increase their maximum excesses, to save money through lower premiums.
“We are also investing around $6.4 billion every year in the private health insurance rebate to help keep premiums affordable.”
“There are 37 private health insurance funds operating in Australia and I encourage consumers to shop around to get the best deal for themselves and their families.”
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