Corporate health insurers are being accused of increasing their premiums, not to increase patient outcomes, but rather to line their own pockets.
APRA’s mandatory private health insurance reporting data shows in the three months to June, corporate health insurers raked in gross mega-COVID-profits of $1.03 billion, despite bringing forward $1.4 billion in deferred claims, which has been labelled clever accounting to hide real profits. The data also shows a 15.8% rise in management expenses, which include employee bonuses are now at a record high of $650.1 million, every three months.
The Medical Technology Association of Australia (MTAA) has said the Federal Government and MedTech innovators are playing their part in trying to reduce the rise of insurance premiums. Specifically, an October 2017 Agreement, between the MTAA and Minister for Health, Greg Hunt, was signed to provide Australians with private health insurance a saving of $1.1 billion in payments for medical devices, over four years.
Private Healthcare Australia (PHA), the industry lobby group for corporate health insurers, have said that a reduction in device prices would lead to a decrease in insurance costs. Despite this claim and the signed Agreement, it appears corporate health insurers are continuing to raise their premiums for struggling families, regardless of the MedTech industry’s $1.1 billion olive branch.
Professor for Health Economics at the University of Melbourne, Yuting Zhang, recently wrote “the reasons insurance companies are using to justify their price rise don’t stack up”.
Not all insurers seem to be rising their premiums. HBF and some smaller funds have decided to cancel their 2020 premium increases, knowing that during COVID-19, it is not the time to make it harder for their customers.
MTAA CEO, Ian Burgess, has called on corporate insurers to ditch their premium increases and return the money to families who need it most.
“MTAA and the Government delivered $1.1 Billion in savings, now is the time to pass this on in full: insurers must forgo their premium increase, give money back to Aussie Mums and Dads – it’s time they put people before profits.”