Young Australians continue to drop private health insurance coverage en masse, as consumer advocates say they are “voting with their feet” and health economists re-launch calls for a review of the system.
- More than 9,000 people abandoned their private health insurance at the end of last year
- Reimbursable expenses for hospital visits increased by 3.2% in 2019
- This left patients facing, on average, a bill of $ 300 for their hospital visit.
The latest figures from the Australian Prudential Regulation Authority (APRA) show that overall, around 9,400 people abandoned their private health coverage in the last three months of last year, meaning that only 44% of Australians now have basic hospital coverage.
In line with trends and experts’ concerns, the largest drop in coverage was among young people aged 25 to 29.
APRA said the private health sector continued to “face risks associated with affordability” that have resulted in continued decline in membership.
His report also showed personal spending for hospital visits increased 3.2% over the year, with people paying an average variance payment of $ 300 in the last quarter.
Macquarie University health economics professor Henry Cutler said the data reinforced trends that showed the departure of young and healthy people from private health insurers covering a greater proportion of older and expensive users.
“This means those with low costs drop out of private health insurance and those with high costs enter,” said Professor Cutler.
“This will obviously have impacts on the total cost of private health insurance and on how private health insurers finance this cost.”
Consumer group CHOICE said it was “no wonder” Australians are abandoning private health care.
“Today’s APRA statistics are further proof of the death spiral in private health insurance,” said Dean Price of CHOICE.
The chief executive of the main representative body of the private health insurance industry, Private HealthCare Australia, has argued that health funds are paying more benefits than ever before.
“$ 21.6 billion in benefits in the year 2019 is a record amount we have paid for people’s health care,” said Rachel David.
“The value proposition for private health care is still very good.”
From April, private health insurance premiums will increase by an average of 2.92 percent.
But Dr David argued that the industry had worked hard to keep costs low.
“We understand that consumers sometimes find it difficult to pay high premiums, but we need to reassure people that when the time comes to make a claim, they will be able to claim some of the most expensive procedures in the world and most will not pay. his pocket.”
Blame in-game games
As premiums rise and Australians continue to ditch their private health insurance, various parts of the industry have tried to blame it.
Part of the problem, according to private health insurers, lies in the medical device industry.
Federal Health Minister Greg Hunt recently struck a deal with medical device makers to lower the prices of big ticket items like knee and hip replacements.
But Dr David said they were still too expensive.
“The biggest risk we face right now, which is perfectly clear in the APRA data, is the growth in the volume and cost of medical implants.
“This is an issue that we have consistently raised with the federal government, even though the number of surgeries has remained relatively constant year over year, the number of medical devices claimed has increased disproportionately.”
The medical device industry has strongly contested this, blaming insurers.
“Private health insurers should be forced by the government to lower their premiums below zero next year as long as national participation rates continue to decline,” said Chief Executive Officer of the Medical Technology Association of Australia, Ian Burgess.
Mr Burgess argued that the price of medical devices paid by health insurers has fallen by as much as 38% in the past three years as a result of government reforms.
Professor Cutler said the cost of prosthetics was not the main reason for the increase in premiums, calling on insurers to focus more on preventative health.
He also backed repeated calls by the Federal Labor Party for a review of the Productivity Commission in the sector.
“Private health insurance appears to be unsustainable for the time being in the long run, especially if we have this model of membership change where older people come in and younger people leave,” he said.
“We cannot continue on the same path, there has to be a structural change in the way private health insurance works and interacts with the rest of the health system, and for that to happen there needs to be enough scrutiny. large. ”
But Mr Hunt again ruled out a review.
“What we don’t want to do is stop the process of doing real things,” he said.
“It’s just an excuse to do nothing for two years – I don’t want to do nothing for two years.
“At present, we are involved in an ongoing process of reform. We made the biggest changes in a decade, resulting in the lowest price changes in 19 years.