Private health insurance has reached a “crisis point”, according to the new president of the Australian Medical Association (AMA).
Dr Tony Bartone criticised the Federal Government's retention of low-value 'junk' policies in its new insurance reforms as part of his wide-ranging first speech to the National Press Club in Canberra.
While backing the simplification of the 70,000 options on offer into Gold, Silver and Bronze tiers, which come into effect next April, he said the planned Basic category includes policies which hold little value for consumers.
“We don’t support junk policies. If a Basic policy category doesn’t provide much coverage, that should be made crystal clear.
“Affordability means very little without value. We are clearly at a crisis point in private health insurance, and the Government knows it,” he said.
Australian Private Hospitals Association (APHA) CEO Mr Michael Roff agreed that 'junk' policies offer little to the people who hold them.
“They effectively mean Australians pay twice for public care they can access through Medicare, with none of the benefits of having access to a private hospital or private care.
“We believe the majority of people holding Basic cover are doing so to avoid the Medicare Levy Surcharge. Had this category been abolished, it is likely these people would have paid a bit more to keep their cover and ended up with a policy they could actually use in a private hospital,” Mr Roff said.
Dr Bartone criticised the use of restrictions in Gold, Silver and Bronze policies.
“Restrictions lead people to believe they are covered, when in reality they are exposed to additional costs,” he said. “We can’t have patients finding out they aren’t covered after the event, or when they require treatment and it’s all too late,” he said.