Pay­ing a pre­mium for price-rise pain

The Sunday Telegraph (Sydney) - - THE SAUCE - S UE DUNLEV Y JOHN ROLFE

HEALTH fund pre­mi­ums are about to have their low­est an­nual rise in 18 years — but it will still far ex­ceed in­fla­tion by go­ing up an av­er­age of 2.9 per cent.

And many mem­bers will lose ben­e­fits for pro­ce­dures such as pri­vate births and hip or knee re­place­ments.

The rise will cost a fam­ily about $130 and sin­gles $60 a year and will be 50 per cent above the in­fla­tion rate.

This is even though many fund mem­bers will find their poli­cies will be abol­ished, re­named or stripped of key ben­e­fits un­der re­forms that will sim­plify health cover into four new bands — gold, sil­ver, bronze and ba­sic from April 1.

The Sun­day Tele­graph can re­veal part of the rea­son health fund mem­bers are still pay­ing pre­mium rises above the in­fla­tion rate is they are pay­ing more for hip and knee re­place­ments than pa­tients in the UK and New Zealand.

New re­search for pri­vate funds shows the gouge is adding about two per cent or $400 mil­lion a year to pre­mi­ums. The re­search found mak­ers of re­place­ment hips and knees charge Aus­tralian in­sur­ers half as much again when com­pared to providers in UK or New Zealand.

It was thought this rort, which also af­fects im­plants to pre­vent heart at­tacks, had been stamped out in a 2017 agree­ment last year to cut prices by $1.1 bil­lion over four years.

But re­search sug­gests that the cuts weren’t any­where deep enough.

It af­fects all fund mem­bers, not just those who need a new knee or hip, be­cause it shares out such costs.

For a fam­ily with top cover, pay­ing $5000 a year for in­sur­ance, the im­pact can be as much as $100. A sin­gle pay­ing $2500 an­nu­ally is fork­ing out an ex­tra $50.

There is also a con­sid­er­able cost of tax­pay­ers via the 30 per cent pri­vate health in­sur­ance re­bate.

Pri­vate Health­care Aus­tralia CEO Dr Rachel David said: “Fur­ther re­form of this sec­tor is crit­i­cal if it is go­ing to re­main safe and af­ford­able.”

But Med­i­cal Tech­nol­ogy As­so­ci­a­tion of Aus­tralia CEO Ian Burgess de­nied there was a rort.

Mr Burgess said the in­dus­try had “sin­gle-hand­edly de­liv­ered, for con­sumers, the low­est in­crease to their health in­sur­ance pre­mium in 17 years” ear­lier in 2018.

He said “the vari­a­tions in the price of med­i­cal de­vices re­flects the dif­fer­ing mar­ket en­vi­ron­ments, sup­ply chains, economies of scale and con­trast­ing re­im­burse­ment sys­tems from coun­try to coun­try”.

Health funds need Health Min­is­ter Greg Hunt’s ap­proval for their an­nual pre­mium rises and The Sun­day Tele­graph has been told funds are un­der pres­sure to de­liver an av­er­age rise be­low 3 per cent.

La­bor has vowed to limit health fund pre­mium rises to just two per cent a year for two years if it wins next year’s fed­eral elec­tion.

Syd­ney mum Justene Gor­don said it was frus­trat­ing that while salaries weren’t ris­ing, health in­sur­ance and other costs were in­creas­ing by more than the in­fla­tion rate.

“It means you re­ally have to make de­ci­sions about what is im­por­tant, what we need to keep,” she said.

The fam­ily val­ues its health in­sur­ance and has used it ex­ten­sively to cover ear grom­mets, re­moval of chil­dren’s ton­sils and a bro­ken arm.

Mrs Gor­don said she loves her job as a so­cial worker but ris­ing costs meant work­ing was less of a choice and more of a ne­ces­sity for her fam­ily to make ends meet so they could pay for choices about health­care and school­ing.

She was frus­trated that the cat­e­gory changes may make it harder to af­ford a prod­uct that suits the fam­ily but said some­thing needed to be done to sim­plify in­sur­ance.

Pic­ture: Dy­lan Robin­son

Justene Gor­don wor­ries that changes will make pri­vate health un­af­ford­able for chil­dren To­rah, 6, Owen, 13, and Heath, 11.

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