Health Reform Patients

GOLD, SILVER, BRONZE AND BASIC IS IT JUST A BRANDING EXERCISE?

This week Minister for Health, Greg Hunt MP, unveiled the much-anticipated new gold, silver, bronze and basic classification system for private health insurance policies. The aim is to make the private health insurance sector’s more than 70,000 policies simpler and more affordable for consumers.

Earlier this week Minister Hunt invited stakeholders to comment on the exposure draft of the Private Health Insurance (Reforms) Amendment Rules 2018 (the Rules). The measures contained in the Rules will give effect to elements of the private health insurance reform package.

One industry with a keen interest in ensuring consumers continue to receive access to life saving and life changing medical treatment through their private health insurance is the medical technology (MedTech) industry.

Speaking on behalf of MedTech innovators, Medical Technology Association of Australia (MTAA) CEO, Ian Burgess, said that while MTAA supports the intent of the government’s reforms, there was still concern as to whether complex health insurance policies being peddled by private health insurance providers would continue due to the differences in coverage across a large number of hospital treatment categories.

“MTAA has already played a significant role in addressing the rising financial burden of private health insurance, particularly in terms of value and affordability. Our industry agreed to a reduction in the benefits paid by insurers for devices on the Prostheses List. These actions resulted in savings to insurers of around $1.1 billion, over four years, and underpinned the lowest premium increase in 17 years,” Mr Burgess said.

“The longer and more specific the list of services for inclusion/exclusion in the insurance product tiers, the more complicated the insurance product will be and lead to continued consumer confusion about what they are purchasing.

“Many of the hospital treatments that are flagged to be exclusive to the gold category are associated with clinical conditions with a high and/or growing prevalence. If insurers do not maintain existing coverage for patients with these conditions who are currently covered by low and mid-tier insurance products, consumers will be required to upgrade their cover to ensure they maintain existing levels of coverage, thereby increasing the cost of premiums at the household level.”

Australian Private Hospital Association CEO, Michael Roff, said that while the categories have the potential to make the system easier to understand, there remain concerns about the retention of junk policies.

“It’s disappointing. Not only has the government not addressed the issue of junk policies, it has, in fact, entrenched them with the new ‘basic’ category. Junk policies are a major cause of consumer dissatisfaction when they discover they don’t have cover for private hospital treatment when they need care,” Mr Roff said.

Despite the concerns raised by other industries, Private Healthcare Australia – representing the private health insurance industry – welcomed the government’s announcement saying the new system marks a major improvement to how consumers choose and use their private health insurance.

“Over a two-year period, we have gone through health fund products line by line to classify them into Gold, Silver, Bronze and Basic categories depending on the cost of the product, and the level of cover provided,” Private Healthcare Australia CEO, Dr Rachel David, said.

“This has been a complex process and a balancing act, because we need to ensure consumers have access to products which are both affordable and provide value for money across all life-stages.

“We have been careful not to unintentionally increase complexity, or introduce product changes that would either increase premiums or reduce coverage unnecessarily,” Dr David said.

Many in the industry will continue to look closely at these reforms to see whether they will help stem the flow of consumers opting-out of the private healthcare system, in favour of the public healthcare system.

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