The Australian Private Hospitals Association (APHA) has renewed calls for private health insurers to return profits to policy holders and sought Federal Government intervention to make sure it is done fairly.
As non-urgent elective surgeries are once again restricted in a number of states due to the COVID-19 pandemic, health fund profits are expected to surge.
While some insurers made efforts to return some of their $1.8 billion in ‘deferred claims liability’ accrued in 2020 during last year, the most recent data showed barely a blip in funds returned to members with $1.2 billion still sitting with private health insurers.
Most recently, Medibank has said it will ‘return’ some premiums paid but not used by deferring the planned premium increases. But there is a catch – members must have been with the insurer for five months prior to the planned increase, and remain with them for an additional five months.
These kinds of caveats on returning money that essentially belongs to members have been questioned by APHA.
APHA CEO Michael Roff has called for the Government to formalise a transparent process for the return of deferred claims so Australians can be sure they are getting a fair deal.
“It’s important to determine how much money health insurers are collecting that they thought they’d pay out – and establish a fair process to ensure that money gets back to members,” he said.
“To date, there’s been no process and it’s been less than transparent.”
In June 2021, APHA welcomed Medibank’s move to return $105 million in premiums to two million members, but the current plan to defer premium increases has been questioned.
“A similar plan by the aviation industry was vetoed by the Australian Competition and Consumer Commission (ACCC) which determined credits on flights was not the same as a cash repayment to consumers,” Mr Roff said.
“At a minimum, each private health insurer should be required to publicly declare how much in deferred claims they are holding and outline a plan to pay it back.
“This inaction on the part of insurers needs to be addressed. The minister should look very closely at any insurer trying to increase their premiums while still holding onto large amounts of their members' money in the form of deferred claims.”