Australian healthcare company, Ramsay Health Care, has called on corporate health insurers to pass on the more than $1 billion in gains back to communities.
In a story covered by The Australian, Ramsay Health Care’s chief executive, Craig McNally, discussed the healthcare provider’s $284 million fall in net profit, which has been impacted greatly due to the COVID-19 pandemic.
Despite the sizable impact the pandemic has had on Ramsay Health Care and other health providers, corporate health insurers have continued to rake in profits during the elective surgery hibernation period.
To help mask the appearance of their profits during the pandemic, corporate health insurers have decided to bring forward “deferred claims” totalling $1.4 billion, which, thanks to clever accounting, reduced their reportable profits, despite elective surgery claims being suspended.
Data released by the Australian Prudential Regulatory Authority (APRA) revealed that during the pandemic corporate health insurers have raked in gross mega-COVID-profits of $1.03 billion, while cutting the actual benefits paid to policy holders to $20.3 billion, down $600 million from 2019.
Mr McNally said the APRA data shows corporate health insurers have saved over $1 billion in claims costs for the last quarter.
“Their windfall gains put them in a very strong financial position and it would be unreasonable of them not to look at what the broader impact on the system is,” Mr McNally told The Australian.
The relationship between corporate health insurers and others in the health sector have become increasingly tense. As many health industries have continued to make cuts to support the Government’s COVID-19 response, impacting their bottom lines, the private health insurance industry has been accused of profiteering on the back of the once-in-a-generation health crisis.
The association representing medical technology innovators, MTAA, has also called out the corporate insurers, urging them to reverse their premium increases and return windfall profits to their customers.
“If private health insurers in Ireland, and even car insurers in Australia, can return premiums to their customers in this crisis, why can’t corporate health insurers give back some of their windfall profits to struggling Australian families? Why can’t they put people before profits?” Mr Burgess asked.
Many in the health sector will be keeping a keen eye on corporate health insurers to make sure their customers will actually receive the value for these deferred claims.