The continued rise of exclusions in health insurance policies

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Australians continue to be sold private health insurance policies that will not cover all their health care needs, according to the latest data.

The Australian Prudential Regulation Authority data released this week shows policies with exclusions have increased to 38.5% – up 2.1 percentage points in the year.

Australian Private Hospitals Association (APHA) CEO Mr Michael Roff said there had been a steady increase in exclusionary products over the past decade.

“Since 2007 the number of Australians covered by policies that exclude access to some services has increased 618%. The percentage of people covered by private health insurance that excludes some services has risen from 6.5% in 2007 to 37.8% this year.”

He said not only are exclusions increasing, but Australians confusion about what their policy does and does not cover is also on the rise.

“There is clearly work to be done to increase consumers’ awareness and understanding of their private health insurance. The Government has committed to simplifying the language in policies and setting standard medical terms and, if properly implemented, that could go some way to addressing concerns.

“However, at present there is no compulsion for private insurance companies to make sure they are well informed about their policy’s limitations or to ensure their policy suits their particular stage of life. Often it falls to private hospitals, who are called on when the patient is vulnerable and in need of help, to inform them they can’t access the care they need because of an exclusion clause in their health insurance,” he said.

The private hospitals make a significant contribution to health care in Australia – recording 907, 256 hospital treatment episodes in this quarter.

However, a number of private patients were seen in the public hospital system, 17.7% of private episodes occurred in public hospitals, which could be dramatically impacting the public system’s ability to meet waiting list pressures, he said.

“Private hospitals provide 60% of acute surgery, 70% of rehabilitation services and 75% of eye procedures taking pressure off the already stretched public system. There is capacity for private hospitals to do more, but we need to address the high numbers of private patients in public hospitals and the impact that has on access to public health care,” he said.

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