Private health insurance participation continues its downward trend, the latest data shows.
The Australian Prudential Regulation Authority (APRA) has reported that the number of people with private cover is at its lowest since June 2011.
Australian Private Hospitals Association (APHA) CEO Mr Michael Roff said to slow this decline, insurers must take advantage of health reforms to improve their products and prove their value to customers.
“Only 45.6 percent of Australians – a little over 11 million – have hospital cover, a drop of about 12,300 people this quarter and more than 21,000 over the year.
“On top of that, more than 40 percent of hospital cover policies contained exclusions, so Australians might find their cover is not as complete as they believe it to be and may result in a nasty shock should they find themselves in need of care.
“Too often private hospitals have to tell vulnerable Australians in need of care that their private health insurance will not pay for a procedure they thought they had cover for. No wonder people don’t recognise its value,” he said.
Mr Roff said Australians want private health insurance policies they can understand and easily compare, which meet their individual needs, and have common medical terms. These are all aims, but not yet realities, for health insurance reform.
“We applaud the Federal Government’s moves to reform private health insurance to better serve the needs of the Australian people. It’s clear from these latest statistics that health insurance companies have a lot of work to do to convince people they are getting value for money or understand their policy,” he said.
The APRA data also showed private hospitals are shouldering a large part of the healthcare burden, providing 1.2 million treatment episodes per year.
“This is an increase of 2.6 percent over the year, alleviating pressure on the public hospital system," Mr Roff said.
While private hospitals are playing their part, public hospitals are not helping their own waiting lists by putting privately-insured patients ahead of public patients in their queues, he added. The number of privately-insured patients in public hospitals grew by 1.4 percent in the year, adding to more waiting-list pain for those unable to afford private care.
“We are pleased to see that the Heads of Agreement between the Commonwealth and the States on public hospital funding seek to address this practice. It now costs private health insurers $1.5 billion in benefits each year, an unnecessary cost shift leading to higher premiums. It also puts those least able to pay at the bottom of the healthcare heap – exactly the opposite of what Medicare was designed to deliver,” Mr Roff said.