Consumers urged to take back control of their health spending from private health funds

5 March 2018

The Australian Dental Association (ADA) says the direction that Bupa has taken this week shows that there
is a definite move by health funds towards the introduction of ‘managed care’ and this will be a bad move
for consumers. In response the ADA has today called for bipartisan support for tax incentives to allow
individuals to save for their own health care as an alternative to taking out general treatment cover.

Releasing the findings of a report ‘Saving for Ones’ Care’ prepared for the ADA by the Centre for
International Economics, Dr Hugo Sachs, ADA President reiterated previous claims that extras cover is not
good value for consumers.

“Existing funding arrangements for dental and allied health care are not meeting the needs of many
Australians. Many consumers with general treatment cover:

- are penalised through differential rebates because they prefer to see a practitioner of their
- pay high out-of-pocket costs due to gaps and exclusions in policies,
- receive minimal annual increases in rebates for services such as dental, and
- are subject to annual limits that often restrict what treatment they can have.

“Governments could use tax incentives for health savings accounts to offer positive incentives to save for
one’s care in a way that is consumer-centered, without barriers to consumer choice, and where consumers
are rewarded for proactively managing their dental and allied health care in a way that is easily
understood”, added Dr Sachs.

Health savings accounts present an opportunity to encourage Australians to save for their dental and allied
health care, overcoming the limitations to general treatment cover and introducing a reward-based
proactive approach to health care.

The ADA has repeatedly stated that extras or general treatment insurance is not real insurance. Insurance
as a product protects against unexpected costs. Extras cover provides a subsidy at best and has so many
claiming restrictions and caps that patients end up with large out-of-pocket costs.

“The reality is Australians have been experiencing more out-of-pocket costs and are paying more in
premiums over the last 15 years. Bupa policy holders are now facing even more restrictions. The system is
not working and it’s time to go back to the drawing board”.
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