Australia’s private health insurance funds are doing everything possible to ease financial pressure on their members and continue to provide essential health services, said Dr Rachel David, chief executive of Private Healthcare Australia (PHA).
Among the measures they have taken are postponement of the annual 1 April premium increase; targeting financial relief to those most in need because they have lost their jobs, are underemployed or have contracted the virus and giving a commitment that any savings resulting from the cancellation of elective surgery and some allied health services will be returned to members.
Dr David said, “Health funds are going to extreme lengths to support members, covering out of hospital mental health services and allied health services including critical dental care, and funding vital telehealth services for psychology and physiotherapy.”
Health insurance premium refunds
Modelling by the think tank Australia Institute argues hospital insurance benefits may be reduced by between 50% and 70% and extras claims by 10% to 30%.
Roy Harvey and Rod Campbell argue in the Institute’s modelling: “Commonwealth and state use of private hospitals during the coronavirus pandemic, combined with social distancing measures, could cut benefit payments to people insured by Australia’s private health insurers by 30% to 50%, or A$3.5bn ($2.2bn) to A$5.5bn. Regulators should enforce a similar reduction in premium payments.”
“From an ethical standpoint these savings should be returned to private health insurance policy holders, which would also assist with economic recovery post-crisis. Funds would still have very much the same reserves at the end of the crisis as they do now.”
The federal government cancelled all elective surgery in March to free up beds for COVID-19 patients, and to preserve limited personal protective equipment for health professionals.