Mr Burgess said Medibank’s attempts this week to blame medical device usage for its alleged profit downturn flies in the face of APRA data released Tuesday, showing insurer net profit after tax (NPAT) was up 21 per cent in the Dec 19 Qtr from $1.19 billion to $1.44 billion.
Medibank also failed to declare today the upwards of $400 million in direct medical device savings Health Minister Greg Hunt had already delivered private health insurers since 2017.
“It’s comments like these from Medibank today that are destroying consumer and investor confidence in their own products and performance, as well as the broader sector. No wonder they’re in a self-proclaimed ‘death spiral’,” Mr Burgess said.
“Private health insurers haven’t paid one extra cent for medical devices over the past two premium years, despite raising premiums twice-inflation and banking nearly $1 billion in profits between the big corporate health funds, including Medibank.
“It’s not the role of medical devices to keep propping up Medibank’s managerial inaction and incompetence, while they continue to feather their nest with taxpayer handouts and corporate bailouts.
“Medibank’s management seems to routinely fail to understand that timely access to the best and latest medical devices is exactly why their customers put up with years of premium pain. Reducing access will only reduce customers.
“Medibank’s customers have clearly had enough of their premiums increasing faster than house prices with no matching increase in benefits and are finally cashing in their chips before they’re forced out altogether.
“If Medibank can still afford to pay a dividend to its shareholders, it can afford to drop its prices for its customers.”
Mr Burgess also questioned why there was no mention in Medibank’s statement today of the benefits that were about to flow through from recent price cuts on 1 Feb 2020 to over 7000 medical technologies like pacemakers, insulin pumps, eye lenses, hip and knee replacements and more.
“Medical device manufactures have cut their prices upwards of 40 per cent in the past 3 years as a result of the direct lobbying of insurers like Medibank to help reduce premiums and increase access.
“It’s a safe bet that the first private health insurer whose premium increases go below zero will increase their market share overnight.