Doctors in Australia are calling for the establishment of an independent regulatory body to oversee private health insurance companies as Gold insurance premiums soar. Compare costs by state.
Business leaders have issued a warning to Finance Minister Jim Chalmers against undermining Australia’s market-based system in its quest to transform capitalism. Leaders in the health, pension, mining and insurance sectors welcomed the vision but said it could make markets vulnerable and minimize profits. Dr Chalmers’ essay on Monday drew criticism after he promised to increase government intervention in the post-pandemic economy by reforming energy markets, finance and social services.
“Today there is a black hole in policy reform in the private health sector, leading to a system that does not balance the needs of hospitals, medical device manufacturers, doctors, insurance companies and most importantly – patients,” said Australian Medical Association president Professor Steve Robson. .
“Private health policy has been in a ‘set it and forget it’ mode for some time, meaning the system is lagging behind changing customer needs and demographics,” says Professor Robson.
Earlier this week News Corp revealed three of the four major funds would raise premiums on Gold products by 6-8 percent, more than double the “average” increase of 2.9 percent announced by the government.
The health insurance lobby group itself has admitted that at prices as high as $8600 in some states, gold coverage is now out of reach and they are even calling on the government to reform the system.
The AMA wants private health insurance coverage to be extended to out-of-hospital care, as well as legislation requiring all providers to return 90 percent of dollars in premiums paid annually to consumers.
“Patients have a right to expect to receive real value from their private health insurance policies, and the AMA believes that the government should set a minimum amount that each insurance company must pay to return to treat patients in the form of benefits claims,” said Professor Robson.
“If we really want reform, including a better healthcare model and affordable private health insurance amid Australia’s cost of living crisis, we need to work together as an industry – with the government – to make those changes happen. Private Health System Authorities can be a mechanism to make this happen,” he said.
This comes at a time when millions of Australians are trapped in the costly zip code lottery and are paying more than $2000 a year in health coverage than if they lived in another state.
A News Corp investigation found that Victorian and Queensland residents paid some of the highest Gold insurance premiums in the country.
South Australia has the cheapest health insurance premiums in the country.
When premium increases go into effect in the coming months, nib members living in Victoria will pay $2,044 more a year for Gold cover than members of the same fund living in South Australia.
If you live in NSW, health insurance is $737 cheaper than Victoria, Medibank cover is $663 cheaper, Bupa cover is $612 cheaper, and HCF cover is $787 cheaper than Victoria.
If you live in Queensland you will pay $1,704 more for Gold nib protection than if you live in South Australia, Bupa Gold coverage will cost you $588 more than in NSW and Medibank $574 more than in NSW.
The reasons are varied and complex and some involve the way insurers spread the risk of high-cost claims among funds to prevent a single super-high-cost claim from unfairly driving up premiums for members in a health fund.
These risk equity pools are organized by state so higher claims in one state can help drive up premiums in that state, explains Private Healthcare Australia analyst Ben Harris.
Another reason why health fund premiums in Queensland and Victoria are higher is that people tend to have low-value operations such as repeat colonoscopy and gastroscopy under private insurance.
Queensland has the highest repeat colonoscopy rate in the country. For every 100,000 people in Queensland there were 596 repeat colonoscopies, 562 in Victoria but only 517 in NSW, according to the Australian Atlas of Healthcare Variation.
Recurrent gastroscopy was performed at an average of 353 per 100,000 population in Queensland, 340 in Victoria, but only 321 in South Australia and only 264 in South Australia, the atlas said.
Victoria also has the highest level of ear surgery to insert grommets that drain the ear canal.
Harris says demographics also play a role – for example people living in Victoria and Tasmania are older which means they are more likely to use their insurance and this will drive up premiums.
Victorians are also more likely to use private hospitals when they use their insurance than members of health funds in other states, he said.
Another factor is that some states include ambulance levy fees under private health insurance.
“Our health system is inconsistent across the country, whether it’s access to Medicare, the public hospital system, private hospitals, or doctors. Private health insurance has varying gaps to fill, which can lead to different premiums across the country,” said Harris, director of policy and research at Private Healthcare Australia.
“Doctors and hospitals vary across the country in the amount of care they provide. In some cases, there may be overservice, which results in greater costs for everyone in the state,” he said.
“The health fund will provide different discounts to doctors in different states to ensure customers have access to services,” he said.
The Australian Medical Association has revealed how health funds provide different discounts for the same surgery in different states.
In its 2020 private health insurance Report, it stated that Bupa paid $347 more for a knee replacement in Victoria than for the same procedure in NSW/ACT, Queensland, Western Australia and Tasmania.
They pay $264 more to have a baby in NSW than in Tasmania.
News Corp previously disclosed the costs of medical disparities faced by members of the health fund also vary by state. This suggests that it will be less expensive for patients to get on a plane and travel interstate for their surgery.
However, this can also increase premium costs.
In its 2020 report, the AMA indicated that Bupa members are more likely to face a cost gap in NSW (10.4 percent gap) than Victoria (6.7 percent gap) and South Australia (4.7 percent gap).
Medibank members in the ACT are more likely to face gap costs (16.8 percent) than Victorians (7.1 percent).
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