PHI increase is the biggest scare you’ll get this Halloween says ADA

24 October 2019

Halloween just got even scarier with another nail in the coffin of private health insurance (PHI), with the health insurance industry announcement that premiums face significant increases next year.

But there’s an obvious solution to the nightmare of paying private health insurance, says the Australian Dental Association (ADA).

The Executive of the peak dentistry body is at Parliament House today meeting with MPs to urge them to consider an independent review of private health insurance before the current policyholder exodus creates an even greater burden on the public health system.

“The announcement that premiums would probably shoot up twice the rate of inflation from April 1 2020, coupled with the exodus of people not renewing their policy due to the poor value for money ‘extras cover’ represents, both sound the death knell of PHI for millions of Australians,” said ADA President Dr Carmelo Bonanno.

“And claims by Private Health Care Australia that they’re the biggest funders of health insurance is the biggest joke. Consumers fund over 65% of their own dental care - not health insurers.”

The ADA is applauding the private member’s bill being tabled by independent MP Andrew Wilkie next week, which seeks to enshrine in legislation Recommendation 12 from the Senate review into the value and affordability of PHI to prohibit the practice of differential rebates.

This is a policy the ADA has long insisted is the only way forward for the beleaguered health insurance industry.
“The ADA has been saying for several years now – there is an affordable alternative – our Health Savings Account (HSA). It’s absolutely the right time for the government to closely look at this as the real alternative to PHI, to make healthcare affordable.”

Dentists are frequently criticised for their fees – yet the ADA has repeatedly demonstrated that dental fees are consistently well below inflation. Meanwhile benefits paid for treatment under some policies have not increased for years.

“It’s a perfect storm,” said Dr Bonanno. “Relentlessly increasing premiums and benefits not keeping up with inflation – little wonder 65,000 fewer Australians had PHI in the 12 months to December 2018, according to the latest APRA figures.

“But we’re offering Australians a lifeline so they can still afford the dental, physio, optometry and other ‘extras’ most people need regularly throughout the year, with our HSAs.

“Keeping the money you would’ve given the insurance company and putting it into a designated savings account ready for when you need it – and reaping the reward of the interest accrued as it sits there –it’s a win-win for the consumer.”

The ADA engaged the Centre For International Economics to prepare a detailed report on the feasibility of introducing HSAs in 2018, similar to the model used in Singapore. The Saving For One’s Care Report demonstrated the viability and benefits to individuals of HSAs.

But to make it competitive and to incentivise Australians to starting saving, the government needs to apply the same tax incentives as those offered to individuals who take out private health insurance.

“We’ve been demanding this for years now. Why isn’t the government listening? It’s more than time for an independent review of the system that also takes a serious look at giving consumers access to a government-supported Health Savings Account.”
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