Health insurance ailing
AMA says falling rate of private cover ‘worrying’
DOCTORS are warning health fund membership has entered a death spiral, as the percentage of the population covered plunges to 45.5 per cent.
Despite the drop, official government data shows health fund profits are continuing to soar to more than $1.38 billion as policies cover less of member health bills.
Opposition Health Spokesman Catherine King said this meant the 13 million Australians with private health insurance were each contributing about $280 a year to the bottom line of the insurers, rather than to consumer benefits.
Health fund membership has dropped from a peak of 47.6 per cent of the population in 2017, and there were 7365 fewer hospital policies in March 2018 than March 2017.
The latest fall in membership came before the latest twice-the-inflation rate premium hike of 3.95 per cent that took effect in April, and despite government reforms saving the industry $1 billion.
“I do worry we are getting closer and closer to the tipping point,” Australian Medical Association president Dr Michael Gannon said.
Of greatest concern is the trend of young people, aged 20-34, dropping their cover. The biggest increase in health coverage was those aged 70-74.
This spells serious problems for the industry because it means more old and sick people – who will use their cover – are joining funds while young and healthy people who are less likely to use insurance are quitting. This will increase pressure on premium rises.
While health fund members are paying higher premiums policies are covering less.
Medical out-of-pocket expenses faced by patients rose 12.3 per cent over the year and the average medical gap payment is now $166.98.
Plastic surgeons are most likely to charge a gap (38 per cent) followed by ear nose and throat surgeons (29 per cent), urologists and orthopaedic surgeons (25 per cent).
Dr Gannon said the increasing out-of-pocket bills faced by patients was a direct result of the government’s freeze on Medicare rebates.
Doctors costs for staff wages, rents and consumables were continuing to rise while Medicare rebates, which form a key part of health insurance payouts had remained fixed at 2014 levels, he said.
Private Healthcare Australia chief Rachel David said the figures showed Private Health Insurance reforms have had a positive impact on PHI membership.
An extra 50,000 Australians have taken out health cover in the 12 months ending March 2018, she said.