Why private health insurance is in jeopardy in Australia
Health fund members could soon have to pay hundreds more in premiums if they wish to remain covered for heart attacks, joint replacements, dialysis and cataract surgery under government health reforms.
These health issues would only be covered by Gold or top cover policies under plans to reform private health insurance into new policy bands Gold, Silver, Bronze and Basic.
The reforms are expected to roll out from April 1, 2019.
A Health Department issues paper published online revealed that under Silver cover, health funds will be able to exclude cover for 12 of the 32 treatment areas, reported the Daily Telegraph.
Heart conditions, vascular conditions, eye conditions, cataract surgery, pregnancy, IVF, joint replacements, kidney dialysis, hearing loss surgery, weight loss surgery, insulin pumps and sleep studies could all be excluded from Silver.
If patients wanted to be covered for these conditions, they would have to talk out the top cover which would cost them an extra $300-$500 a year, even though they are currently already covered in the existing system.
For Aussies who are hoping to pay less for their private health insurance they could opt for Bronze, but they won’t be covered for 22 of the 32 hospital treatment categories.
Bronze policies would only cover rehabilitation, mental health, drug and alcohol services, palliative care, brain procedures, broken bones, ear nose and throat, colonoscopies and chemotherapy and radiotherapy for cancer.
As the reforms are fleshed out, health funds have already started to introduce major exclusions, but the new system would allow even more restrictions.
BUPA, Australia’s largest health fund, has recently added new exclusions to around 720,000 of its policies to deny cover for hip and knee replacements, pregnancy, IVF, cataract procedures, obesity and some plastic surgery while premiums continue to increase.
Australian Medical Association president Dr Michael Gannon said a system that requires people to take out Gold level care to access heart services was “clawing away at the value of health insurance”.
“This is not even close to the model the AMA wants,” he said.
The AMA said it wants all hospital services covered in Silver policies with premiums kept lower by larger excess payments instead.
CEO of the Medical Technology Association, Ian Burgess, said he was concerned the proposed reforms will reduce patients access to medical technology, as many procedures will be limited to Gold.
“These services already have extensive waiting lists in the public system and limiting them to Gold will only exacerbate this problem,” he said.
A spokesman for Health Minister Greg Hunt said the government’s reforms had delivered the lowest annual premium change in 17 years – at 3.95 per cent.
“No final decision has been taken on what services will be included in each category. There is no change or addition to the previously announced category types of gold/silver/bronze/basic,” the spokesman said.
Private health insurance is in decline as premiums continue to become too expensive for Aussie families.
A finder.com survey of 1200 health fund members found one in six Australians with private health cover bought the most basic policy to save money.
It also found that in the last 12 months, nearly one in five Australians had downgraded their cover.
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