Govt takes aim at health fund cost
THE Federal Health Minister claims an overhaul of the private health insurance system will lead to cheaper premiums and easier access to mental health care.
Health Minister Greg Hunt announced a major shake-up of the system yesterday, with those under 30 the biggest beneficiaries.
Young people are being targeted as they are generally healthy and less likely to claim.
“The more young people you have in the system, the lower the average cost of premiums for everybody,” Mr Hunt told ABC TV.
Health fund membership has been falling by about 10,000 people a month because of premium rises that have overtaken the inflation rate.
Premiums have risen an average of 5.6% a year since 2010.
Mr Hunt refused to put a figure on how much that would fall but the hope is to get it down to about 3%.
“I’m working with the private health insurers to help drive down premium pressures and they have guaranteed in writing they will pass through all of the cost savings,” he said.
An agreement with makers of hip and knee prostheses and cardiac devices would save insurers about $1 billion over the next four years.
Rachel David, CEO of the health fund peak body Private Healthcare Australia, said that was expected to cut premium increases by about 1% a year.
Mr Hunt claimed it was the biggest private health insurance reform in 15 years and was just the first round.
Australian Medical Association president Michael Gannon said the move wouldn’t solve the issue of affordability, but it was a step in the right direction.
“The biggest problem in the affordability of private health insurance is the amount that’s going into the pockets of the for-profit insurers,” he told ABC radio.
“We need serious reform which addresses the simple fact that (healthcare) costs will continue to increase year on year.”
The changes will make policies cheaper for young people by introducing a premium discount worth 2% per year for each year they belong to a health fund before turning 30, up to a maximum of 10%. This will be phased out gradually by the time they turn 40. Other changes include: Rebates for a large range of unproven “natural therapies” will be banned including Alexander technique, aromatherapy, Bowen therapy, Buteyko, Feldenkrais, herbalism, homeopathy, iridology, kinesiology, naturopathy, Pilates, reflexology, Rolfing, shiatsu, tai chi and yoga.
Travel and accommodation benefits will be included under hospital cover for those taking up a new rural health product.
The cap on excesses (the extra money people agree to pay if they go to hospital or have other expensive procedures such as dental) will go to $750 from $500 for singles and to $1500 from $1000 for families. This should make policies a bit cheaper.