Australians are falling out of love with private health insurance hospital cover, with the latest figures showing the number insured went down by almost 8,000 in the last quarter of 2016.
The Australian Prudential Regulation Authority (APRA) released its December quarterly findings on Valentine’s Day that showed participation rates in private health insurance are at their lowest for nearly five years.
Participation rates have dropped, but the number of health insurance policies with exclusions have increased by 1.7 percentage points in 12 months to December 2016. Nearly 40 per cent of health insurance policies now have exclusions.
Australian Private Hospitals Association (APHA) CEO Michael Roff said the increase in exclusions is adding to Australian consumers’ confusion about private health insurance and impacting the value they see in policies.
“Our research shows that few Australians understand what their cover provides, including 40 per cent of health fund members who don’t know if their policy excludes cover for key services.
“This leaves private hospitals to be the bearer of bad news that patients are not covered for procedures they need, but more transparency in policies would address this,” said Mr Roff.
He said APHA has long campaigned for improved transparency in private health insurance policies, including standardised medical terms, so Australians can better understand their insurance.
Reforming private health insurance is one of the key roles of the Private Health Insurance Ministerial Advisory Committee, of which APHA is a part.
The committee is examining a number of possible reforms to the sector that involve simplifying insurance packages and improving transparency of policies. This work, which commenced in 2016, has been endorsed by new Health Minister Greg Hunt.
The new APRA data comes less than a week after Greg Hunt announced an increase in health insurance premiums of 4.84% from April this year. Discussing the increase, Mr Hunt said private patients being treated in public hospitals is contributing to the pressure on private health insurers.
“As the new Health Minister, I will work with insurers over the next year to find ways insurers can deliver more value for customers without compromising the quality of cover,” said Mr Hunt.
Mr Hunt indicated the 4.84% increase in premiums could have been lower if Medicare was being properly utilised.
The APRA data supports claims that private health insurance is increasingly accessed by public hospitals. Private patients treated in public hospital numbers increased by 9.6% year on year for the December quarter.
Mr Roff said this means many Australians are paying for their health care twice - through their taxes and their health insurance. The data showed private health insurance paid $1.09 billion in benefits to public hospitals in the 12 months to December 2016.
“Public hospitals greed is putting pressure on private health insurance and must be impacting public waiting lists. Those hospitals are setting aside private beds instead of using their tax-payer funded resources to reduce the public waiting list. This is an area ripe for reform,’’ Mr Roff said.
The next set of data will be available in May 2017.