Finance Finance News Private health insurance ‘junk policies ripping Australians off’

Private health insurance ‘junk policies ripping Australians off’

Health insurance
Insurance premiums are going up, but some medications will actually be more affordable. Getty
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Australian doctors have declared private medicine is “under siege”, and are pushing the Federal Government to make “junk” healthcare policies illegal.

The Australian Medical Association (AMA) believes the policies, which do not cover treatment for many illnesses, are ripping people off.

AMA president Michael Gannon called for the law to be changed to ensure all policies contain a minimum level of cover.

“We’ve a proliferation of junk policies which are worth nothing more than the paper they’re written on, and are purely designed so people avoid the tax penalty,” he said.

“The Government has the power to legislate — to make sure that [the policies] are worthwhile for people who take them out.”

The AMA is pushing a plan to streamline thousands of private health insurance policies into simple gold, silver and bronze categories — so people know what they are paying for.

The proposal is before a Government advisory committee, which is due to report by the end of the year.

Is health insurance worth it?

If you’re about to hit your 30s and you haven’t yet got private health insurance, the time to decide is now.

But Dr Gannon said change was needed urgently.

“Private medicine is under siege and, in many ways, that’s because, very quickly, the community is losing faith with their private health insurance, which underpins most visits to private hospitals,” he said.

“And we seem to be seeing an orchestrated campaign by the insurers — an industry which is increasingly a for-profit industry — to deflect the blame from the real problems.

“And the real problems are that patients are getting sick and tired of finding out when they’re sick that their insurance isn’t good enough.”

Dr Gannon said he was advocating for change because he had run out of patience with private health insurers.

“There are people who have carefully, dutifully, responsibly put aside money for private health insurance, over many years in many cases, and then when they get sick they find they’re not covered,” he said.

“Policies for people over the age of 60 that exclude them from having their hips or knees fixed, or having their eyes fixed, are silly.

“Policies that literally will enable a single man to access maternity care, but exclude him from something else he might need are again so ridiculous, it would be funny if it wasn’t so serious.”

Is ‘bewildering number of policies’ deliberate?

Dr Gannon said he was concerned many policies were created to be intentionally opaque.

“There is a bewildering number of policies, and it worries us that this might be quite deliberate,” he said.

“The truth is there are literally thousands and thousands of different types of policies.”

But Private Healthcare Australia chief executive Rachel David said the large number of policies had not been intentionally designed to confuse the public.

“Taking a step back, we need to understand what’s underlying this, and that is that overwhelmingly consumers are concerned about the affordability of private health insurance,” Dr David said.

“And the reason that there has been an increase in the number of products where some treatment areas are excluded is because consumers have been offering more bespoke products or products that are tailored to their life stage.”

Dr David is also on the Government’s advisory committee, and said, while she supported change, legislative amendments could do more harm than good.

“The last thing we want is for the whole private sector to be tied up in so much red tape that that in itself pushes health fund premiums up,” Dr David said.

“There are some things to make it easier for consumers to choose and use health insurance that are being looked at that will require regulatory change.

“It’s not going to be major, but the health insurance industry at least is committed to doing the right thing by consumers and their members.”

In a statement, a spokesman for Health Minister Greg Hunt said the Government was working hard to ensure private health insurance policies were value for money.

“The Minister welcomes the Australian Medical Association’s contribution,” he said.

“The reforms are being actively considered by the Private Health Ministerial Advisory Committee, who will report to the minister in the second half of the year.”


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