The private health insurance industry is committed to keeping premiums as low as the market permits. After all, doing so is in everyone's best interests – to guarantee the sustainability of the industry and ensure that insurance policies remain affordable for all Australians.
This commitment to private health insurance affordability in Australia has been demonstrated by the industry's recent contribution to government reforms. Upcoming changes to prosthesis lists, in particular, showcase that value.
The problem with the prosthesis list
The prosthesis list is a register of all surgically implanted prostheses. When a doctor provides an insured patient with such a product for their treatment, they must consult the list to purchase an approved product in order for the patient to obtain a benefit from the health fund.
In 2015, Private Health Insurance Australia found that health funds were overpaying for these medical devices by $800 million. Data from the Independent Hospitals Pricing Authority later found that the number could in fact be closer to $1 billion.
This overpayment increases the cost of doing business for private health funds, which in turn leads to health insurance premium increases that impact millions of everyday Australians. Without government reforms of private healthcare, it's possible that these costs would continue to impact consumers.
Government reform driven by the industry
In 2015, Private Health Insurance Australia found that health funds were overpaying for these medical devices by $800 million.
It was the industry's astute awareness and analysis that discovered this discrepancy. Now, with the government's help, improvements have been made that will cut the costs of private health insurance policies by $150 per policy on average, a Private Health Insurance media release suggests.
Government prosthesis reforms have been put in place to continue to keep future costs down as well. In fact, a separate media release from Health Minister, Greg Hunt, identified that better value could be achieved for the majority of the 11,000 items on the list.
The Prosthesis List Advisory Committee has set out a comprehensive approach to review all devices to ensure they're delivering cost efficiency. This review, along with a collaborative approach to bringing down costs with the insurance industry, will place downward pressure on premiums for years to come.
With an outlook of decreasing costs and continuing commitment to offering value to consumers, the future's looking bright for the private health insurance industry in Australia. What's more – improvements in the industry mean more affordable premiums for everyday Australians.
To make the most of those affordable premiums, get in touch with the team here at HICA.