News & Trends - Medical Technology

MTAA and APHA reflect on the latest private health insurance data

Health Industry Hub | November 18, 2020 |
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MedTech News: New data shows the private health insurance participation rate increased for the first time since June 2015, but the small blip is not enough to start celebrations of a recovery just yet, warns Australian Private Hospitals Association (APHA) CEO Michael Roff.

The latest data from the Australian Prudential Regulation Authority (APRA) showed a 0.9% increase in membership (104,000 members) over the September quarter.

This report also indicates that private health insurers have increased their revenue by $129 million whilst the amount actually paid back to members has decreased by over $1.125 billion over the last 12 months.

Despite turning a half a billion dollar profit in the midst of a global pandemic, private health insurers have called on the Government to prop them up. This comes at a time when the insurance companies are only paying 89 cents in the dollar back to policy holders, and young people are questioning the value of their policies.

“While it is encouraging to see a small increase in health fund membership, these figures should be treated with caution. We know health insurers have been providing premium relief to policy holders due to COVID-19 and this may be artificially inflating the figures. We need to know if this increase will be sustained or is just a statistical anomaly,” he said.

Mr Roff said one positive in the uptick in participation in private health insurance was the increase in youth participation. 

“The biggest increase was in the 35-to-39 age bracket, followed by those 20-to-24 years old, indicating the youth discount introduced by the Federal Government may be having an impact and bringing younger people into the system.

“Notwithstanding the small increase in membership, there is a very strong case to restore the health insurance rebate for low-income earners. In the years since it was introduced the effective rebate has been reduced from 30% to less than 25%. These households face a ‘double whammy’ of increased premiums and reduced rebates because every year the value of their private health insurance rebate goes down.

“The Federal Government has an opportunity in the 2021 Budget to provide significant relief to these families and make the rebate count again.”

Mr Roff said there was a 23.5% increase in episodes of care in private hospitals this quarter, reflecting the easing of COVID-19 elective surgery restrictions. However, this was still 5.4% lower than the same quarter last year.

Whatever measures are taken to improve affordability in private health insurance, Mr Roff said they need to be considered as a matter of urgency.

“There are estimates the backlog in elective surgery resulting from COVID-19 surgical restrictions could take years to clear, even with the full capacity of the public and private systems. We need to urgently address private health insurance affordability to ensure Australians can continue to access private hospital services because the waiting times in public hospitals will just be too long,” he said.

Medical Technology Association of Australia (MTAA) CEO, Ian Burgess, has called on private health insurers to offer Aussie families a saving, and stop putting profit before patients.

Insurers must stop trying to squeeze profits out of the private health system and stop calling on the Government for a handout whilst continuing to make profits.

“MTAA’s 2017 Agreement with Health Minister, the Hon Greg Hunt MP has locked in at least $1.1 billion savings for the Australian public, now it’s up to insurers to dig into their own profits and offer savings to the Australian people. Insurers must stop choosing profit over patients.” Mr Burgess said.

“As doctors, nurses, MedTech innovators and other and essential works have pulled together to make ventilators, provide COVID-19 testing, and get Australia through the pandemic, struggling Australian families are rightly asking why private health profiteers are still raking in windfall profits”

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