Health insurer profits spur calls for independent private health authority

MedTech News: The corporate health insurance industry has continued to rake in hundreds of millions of dollars more into their coffers while continuing to cry poor to policymakers, according to yesterday’s Australian Prudential Regulation Authority (APRA) data.

The Medical Technology Association of Australia (MTAA) has slammed corporate health insurers, calling out in particular their lobby group Private Healthcare Australia, for their continued campaign to squeeze doctors, hospitals and the medical technology community, blaming them as the sole causes of increasing premiums.

APRA has revealed that insurers’ premium revenue has once again climbed by $464 million, up 1.8%
over the 12 months to December 2022. This data comes as insurers also continue to pay themselves ever increasing management expenses to the sum of $2.7 billion, up 9.2% from December 2021.

MTAA CEO, Ian Burgess, said corporate insurers have no ground to stand on when claiming their
premium hikes were attributable to other factors like medical device benefits.

“It is clear, in black and white, that insurers have the capacity to help drive premiums down by cutting back on their own ‘management expenses’, corporate perks and executive bonuses. It is unacceptable that, while everyday Australians are struggling with the cost-of-living crisis, the corporate health insurance industry is flying sky-high on the backs of their customers,” Mr Burgess said.

Health insurers touting delayed premium rises, but are they delivering value for money to policyholders?

The Australian Medical Association (AMA) has been calling on health insurers to deliver value for money for policyholders following the release of its annual Private Health Insurance Report Card. The report card urged private health insurers to deliver better and fairer value for their policyholders.

The report found that virtually no health insurance policies had exclusions 15 years ago. Over time, the number of policies containing exclusions has grown significantly. In 2018, the number of policies with exclusions overtook the number without.

Professor Robson added “And we have seen an increase of 16% in what is called management fees — that is the sum of money that they take out of your premiums to run their health funds. So, we have seen some big increases across the board and we think that customers in Australia, patients, who are having medical procedures want value for money.”

Mr Burgess added “It’s time for policymakers to look seriously at corporate health insurers and reign in their questionable financial practices, particularly the fact insurers are continuing to hold on to $1.6 billion in ‘Deferred Claims Liabilities’. That is $1.6 billion of their customers money they’ve been holding onto since the Covid-19 pandemic suspended elective surgeries – money that Australian families need back in their pockets.”

MTAA is calling on policyholders to adopt the AMA’s proposal to establish an independent private health authority to review the financial practices of corporate health insurers, review rebates and caps on premiums, and look at a whole-of-industry reform that doesn’t simply focus on squeezing doctors, hospitals and the medtech industry.

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