Call for health insurer to return COVID-19 profits to members

MedTech News: Australian Private Hospitals Association (APHA) is calling on private health insurers to return windfall profits made during the COVID-19 crisis to their members.

Big health insurer nib anticipates a huge payday this financial year and instead of repaying members fees as others have done, they are pocketing the extra cash and boasting about record profits.

APHA CEO Michael Roff said nib has reported it expects its underlying operating profit for the financial year 2020-2021 to be in the range of $200 to $225 million, citing lower than expected catch up from last years’ COVID-19 elective surgery shut downs.

“This would represent a 50% increase in profit on the previous year, driven by the fact nib members paid premiums for services they couldn’t access.

“Funds have been saying they need to hold on to these payments because of the ‘inevitable’ catch up in elective surgeries. But, this is not happening at anywhere near the rate they are suggesting. Instead, they should return the fees paid to their members and stop hoarding cash on a pretence.”

Last year, Medibank Private and Bupa came last in a CHOICE analysis of private health fund COVID-19 responses.

“The two biggest funds have performed the worst when it comes to helping Australians during COVID-19,” said Dean Price, health campaigner at CHOICE. He argued that the funds that have the most capacity to help their customers were shown up by non-profit and smaller funds who have less capacity, but have chosen to put the community first.

Mr Roff said HBF in Western Australia recognised returning unused funds to members was ‘the right thing to do’ and put $40 million back into policyholders’ pockets, while AIA is providing members with an average rebate of around $200 each.

“Medibank reported in March they are holding deferred claims of $310 million, so there are more funds making money out of COVID-19 than not. We also know that activity levels in private hospitals were down 6.9% in 2020 compared to 2019, so the rush to elective surgery has not occurred. There is no reason why all health funds can’t declare how much they will return to members.

“Australians have been hit hard by the pandemic and if private health insurers are holding on to money that could help people struggling to pay the bills they should also ‘do the right thing’,” he said.