ADA, CHOICE and other key groups call for private health insurance inquiry

30 November 2018

The ADA has joined with a broad range of organisations including CHOICE, National Rural Health Alliance and the Consumers’ Federation of Australia in calling on the Federal Government to launch a Productivity Commission into private health insurance. 

The letter, delivered to all Federal MPs yesterday, cites a growing perception by consumers that their private health insurance policies are simply not delivering sufficient value with 70% of people believing that the policies they hold are average or poor value for money.  

The open call to MPs follows the long-running Time2Switch campaign by the ADA which has highlighted the issue of differential rebates where certain extras cover policyholders receive higher benefits that others who are paying the exact same premiums. 

Using the slogan of #SamePolicySameRebate, the ADA has called for an end to the practices that fuel these discriminatory rebates. 

"Private health insurance is sold as allowing consumers choice; but in reality, the current system offers differential rebates based on who provides that service and restricts that choice,” says ADA President Dr Carmelo Bonanno. “If you hold an extras policy with a health fund then you should get exactly the same rebate as anyone else who holds that policy regardless of where you live or which dentist provides the treatment." 

The ADA is also calling for greater transparency by private health funds in the way they present their policies to consumers who are confused by the endless exemptions and caveats placed on the policies they hold. 

The letter cites these issues of high costs & low value and increasing complexity as contributors to a “growing uncertainty of the value and function of private health insurance in Australia” which must be addressed if the rush away from private health insurance is to be effectively tackled. 

More importantly, it is hoped that the Productivity Commission will look beyond the “surface issues of private health insurance and examine whether the current structures, levers and incentives are delivering the best possible health outcomes.” 

The Inquiry has received a lukewarm response from the private health insurance industry which has consistently blamed rising healthcare costs for premium increases. 

ADA President, quoted in The Sydney Morning Herald, has responded to this repeated assertion by pointing to the fact that while premiums have jumped by 27 percent over the past five years, “dental fees have only increased by 8 percent.”