Major advance for ADA in tackling private health insurance issues

29 March 2017

In an important next step towards creating a level playing field between health professions and private health insurers, the ADA has played a pivotal role in the motion to establish a Senate inquiry into private health insurance.

The result of close, behind-the-scenes collaboration over 18 months between the ADA, particularly the ADA South Australia branch, and the Nick Xenophon Team (NXT), it is proposed that the inquiry will cover a broad range of issues within its terms of reference, issues which the ADA has consistently urged the government to take action on over a number of years.

The Senate inquiry, the motion for which is being tabled today by Nick Xenophon, leader of NXT, has attracted the support of Labor, the Greens and the cross bench, and is expected to bring pressure to bear on the government to address major systemic issues in the private health insurance industry.

The terms of reference have been confirmed will include:

(a) private and public hospital costs and the interaction between the private and public hospital systems and any impact on waiting lists;
(b) the effect of co-payments and medical gaps on financial and health outcomes;
(c) private health insurance product design and benefit levels, including rebate consistency and public disclosure requirements;
(d) the use and sharing of membership and related health data;
(e) the take-up rates of private health insurance;
(f) standards relating to informed financial consent for medical practitioners, private health insurance providers and private hospitals.
(g) medical services delivery methods;
(h) the role and function of:
    (i) medical pricing schedules, including the Medicare Benefits Schedule, the Australian Medical Association fee schedule and private health insurers' fee schedules,
    (ii) the Australian Prudential Regulation Authority (APRA) in regulating private health insurers, and
    (iii) the Department of Health in regulating private health insurers and private hospital operators;
(i) the operation of relevant legislative and regulatory instruments; and
(j) any other related matter.

ADA President Dr Hugo Sachs has welcomed the proposed inquiry, citing its potential to shine on a harsh spotlight on a range of deleterious private health insurance practices.

“Not only are private health insurers failing to adequately increase their rebates for general treatment services, they use discriminatory rebates that make it harder for consumers to see the healthcare provider of their choice; interfering with their continuity of care. Common in private health insurance, discriminatory rebates offer higher rebates for the policy holder who sees a health provider who is contracted to that private health insurer; yet the other policy holder who pays the same premium for the same policy receives a lower rebate if they choose to maintain a relationship with their existing un-contracted healthcare provider. 

“Discriminatory rebates make one policy holder have a higher out of pocket cost and effectively subsidise the other policy holder’s costs of seeing the practitioner who is contracted to the insurer. This also has the effect over time of driving out small business independent practices. It’s a triple whammy”.

The inquiry is a natural outworking of the ADA’s Time2Switch campaign, which has sought to highlight the critically-important issues affecting the relationship between health professions and private health insurers, and to encourage consumers to fundamentally reassess whether their current private health insurance policy is actually meeting their needs and to voice their dissatisfaction with the current situation.

It also continues and expands the close working relationship that the ADA enjoys with a range of political groups in Federal Parliament, which has played a key role in the retention of schemes like the CDBS and which it is hoped will have a significant part to play in the redefining of the relationship between health professions and private health insurers well into the future.

If you have yet to make a professional complaint to the Private Health Insurance Ombudsman, or to encourage your patients to lodge a patient complaint, please go to time2switch