Private health care industry calls out ‘inflammatory’ and ‘dangerous’ comments

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The leading private health bodies have come out against ‘inflammatory’ and ‘potentially dangerous’ comments made by the industry regulator.

Private Healthcare Australia (PHA) and the Australian Private Hospitals Association (APHA) have called on Government to ignore the regulators calls for a further review of private health insurance and reconsideration of community rating.

Responding to a speech given by Australian Prudential Regulation Authority (APRA) Executive Board Member Geoff Summerhayes, PHA CEO Rachel David said there is no need for another major review, now is the time for action and proactivity on the part of the funds and health industry stakeholders.

Catholic Health Australia CEO Pat Garcia said older Australians would be disadvantaged by the move to abolish community rating.

“Adjusting premiums based on a person's age or health status would undoubtedly lead to lower premiums for the young and healthy. But, that comes at a price. Older Australians will end up paying significantly higher premiums.

“And if you are young and have a complex health need you are also going to end up paying significantly more too.

"This will only place pressure on our already overburdened public health system as many people will simply drop their cover as it will become too expensive. That is the very last thing we need right now,” he said.

APHA CEO Michael Roff said Mr Summerhayes’ remarks would unnecessarily undermine public confidence in the private health system and the policy options he proposed were unworkable and must be rejected.

“These comments have the potential to damage public confidence in the entire private health sector at a time when the Government is trying to enhance the value of the private health offering through a process of ongoing reform,” Mr Roff said.

“Furthermore, attempts to abolish community rating would result in massive price increases for older, vulnerable Australians, effectively making health insurance unaffordable for the people who need it most. This would lead to an increased burden on the already struggling public hospital system, increasing waiting times and dissatisfaction with the public system.”

Even more concerning is the apparent push by the regulator for health fund consolidation, which would erode Australian’s choice and value by reducing the diversity and competition that exists in the current market, he said.

“Far from a declining membership, as Mr Summerhayes claims, we understand smaller health funds have been experiencing increased membership in general, including in younger age cohorts, at the expense of the larger health funds. This would indicate consumers appreciate the choice and value provided by smaller funds, something APRA wants to see removed.

“In addition, Mr Summerhayes comments indicate APRA would like to restrict health insurance coverage for mental illness. This is a key area of Government reform, with the recent changes allowing an immediate upgrade to private psychiatric care proving successful, providing access to mental health treatment for thousands of Australians. We can’t afford to go backwards on the provision of mental health care,” he said.

APHA continues to argue for practical policy reforms, including the restoration of the full health insurance rebate for low-income earners and adjusting the levels of the Medicare Levy Surcharge to incentivise high-income earners to take up and maintain private health insurance.

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