Premiums up, politicians mute & patients worse off

WHOEVER decided health insurance premiums kick-in on April Fool's Day had a warped sense of humour.

While officially premiums go up an average 3.73% this month, in reality, the majority of the 12.3 million Aussies with private hospital cover will pay much more. Insurers with the lion's share of members are averaging 3.99% (Medibank), 5.1% (BUPA) and 5.79% (NIB). But, it gets worse, as we now know that these big-end-of-town insurance companies are jacking up policies by as much as 8-9%.

"It's a massive hit on families already struggling with growing cost-of-living pressures. Rubbing salt into those wounds, the insurance companies are reaping windfalls of $2 billion a year in record profits, on top of $3.5 billion a year in 'management fees'. All plucked from people's annual premiums," APHA CEO Brett Heffernan said.

"At the same time, the health insurance industry has short-changed private hospitals by billions – that is, refusing to pay in full for the treatments and care hospitals provide to the tune of $3 billion over the last three years.

"The consequences of the Federal Government leaving insurers to their own devices is more than 70 service closures, including maternity and mental health units, in addition to 20 private hospitals closing entirely.

"The flow-on of that is Aussies with hospital cover have less access and choice in the services their premiums are supposed to pay for, while compromising on the quality they expect given hospitals running at losses or barely breaking even cannot properly invest in hospital operations.

"No one will be surprised that insurance companies act in such unconscionable ways when left unchecked. The Albanese Government's lack of proactive oversight, despite being fully aware of the issues for more
than two years, is perplexing.

"So far the federal election campaign has ignored the critical need for funding reform between hospitals and insurers. After two-and-a-half years of briefing Health Minister Mark Butler on the manifestation and deepening crisis on his watch, the government has failed to act in any way.

"Instead, the health insurance industry has been allowed to run amok, free of any checks or balances by the Federal Government. The Health Minister could have picked up the phone to the insurers in 2022 when the shortfall in funding from the insurers was $660 million. But with no pushback from the Minister, that ballooned to $1.135 billion in 2023 and last year was a whopping $1.254 billion.

"We welcome Minister Butler's election-eve commitment to 'to take action on payments to private hospitals within the next three months, directing they increase funding to a greater portion of their benefits'. But it will be too little, too late for some hospitals in staving off collapse.

"These issues affect the entire hospital system – private and public.

"The failure to address these issues two years ago, or even six months ago when the release of the Private Hospitals Viability Health Check resulted in not a single solution, left 12.3 million Aussies who are doing the right thing by taking out hospital insurance badly exposed. They are paying ever-growing premiums while the private hospital system is likely to see more closures.

"Once upon a time both sides of politics recognised the importance of Australia's balanced public-private hospital system. With private hospitals accounting for 70% of all planned surgery, 1.6 million medical treatments each year, including the majority (54%) of chemotherapy, 62% of acute mental health care and 80% of hospital rehabilitation, ignoring the insurer-induced crisis risks plunging public hospitals into even deeper disaster.

"Equally, the Federal Opposition does not, so far, appear willing to grasp the nettle of essential funding reform. Mr Dutton must, at least, match the commitment made by Mr Butler in bringing the insurance industry to account.

"To be clear, the issues affecting private hospitals are not volume-related. When you're being underpaid for the treatment you provide, then performing 10, 100 or 1,000 procedures doesn't matter much, in fact, the more you do only compounds the funding shortfall.

"Private hospitals – for profit and not for profit – all have to make margin to be able to reinvest in the technologies, procedures, services and care people pay their premiums to access. Over three years we've seen clear market failure. Patient care and the whole health system are in jeopardy when governments and would-be governments leave private hospitals to the mercy of insurance companies."

-ENDS-

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