The debate continues with private health insurers while consumers pay for increased premiums

MedTech News: Quarterly reports by the Australian Prudential Regulation Authority (APRA) have exposed the continued profiteering of the private health insurance industry while consumers get ready for another premium rise.

According to the key performance metrics for the past 12 months, corporate insurance executives have experienced another stellar year raking in $1.8 billion in after tax profit, 229.3% increase from last year.

The corporate insurance industry is yet again taking advantage of COVID-19 restrictions to hospital surgeries, pocketing the premiums they didn’t pay out rather than refunding them back to consumers who’ve had to go without surgeries.

MTAA CEO, Ian Burgess, called out insurers’ continued profiteering off the back of the pandemic and their unjustifiable ‘management expenses’, all the while trying to force consumers to pay higher premiums in exchange for less services and benefits.

“It shows just how little insurers think of the Australian public, that they’re falsely claiming the cost of prostheses, which only makes up 10% of total benefit, is the cause of rising premiums, while their own management expenses paying for executive salaries, bonuses and expensive offices have increased 6.6% to $2.5 billion,” Mr Burgess said.

“Insurers have continued to benefit from reductions in medical device pricing, with average benefits paid for devices falling 15% over the last five years. The truth is insurers spend more on themselves and management fees than they do for life-saving medical technologies for patients.”

Despite the cost of prostheses making up only 10% of the total paid benefits, Private Healthcare Australian CEO, Dr Rachel David, said “Unfortunately, the cost of generic medical devices is consistently identified by APRA as the fastest growing area of healthcare claims expenditure, and therefore the main driver of premium increases.  Over the past two years, growth in benefits paid for medical devices (3.8%) has exceeded growth in benefits paid for medical services (3.0%).

“Under the Government’s current pricing agreement with multinational medical device companies, patients are forced to pay 30-100% more for the same medical devices compared to France, New Zealand and the UK.”

Most health insurance premiums will also increase on 1 April 2022 by an average of 2.7%. The lowest increase will be Health Care Insurance with 1.09%, while CBHS Corporate will have the largest average increase for the second year in a row with a 5.33% price hike across their policies.

Several big insurers announced above-average increases, but some health funds will delay price increases until later in 2022. These include Medibank, AHM and NIB (1 September) and HCF (1 November). Premiums have increased by 54% in the last decade, while the consumer price index (CPI) grew only 20%.

“This year’s premium price hike made people question their need for expensive health insurance,” said CHOICE senior campaigner Dean Price.

Since the start of the pandemic, insurance companies have amassed $1.4 billion in COVID cash which they’re calling ‘deferred claims liabilities’ which is the money they were supposed to pay out to consumers who needed surgeries but instead pocketed it when surgeries were suspended.

MTAA is calling on whom ever forms government after the next election to investigate insurer’s COVID profits and introduce legislation to require insurers to refund this $1.4 billion directly back to Australians.