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COTA

Emergency attention needed for ailing health insurance system

Media Release 30th January 2016

Leading seniors advocate, COTA Australia, today welcomed moves by the Federal Government to require more information from private health insurers before automatically approving premium insurance hikes.

COTA Chief Executive Ian Yates said the ongoing increases in private health insurance are making it increasingly unaffordable for more and more people and there is evidence that flaws in the health financing system are exacerbating the problem.

Mr Yates said these flaws require action by both government and the private health insurance sector as they are the result of previous failures by both that result in Australians paying higher prices than in comparable countries.

He said the government must protect consumers, and tax-payers, from forking out to line the pockets of health product manufacturers and private hospitals with private health insurance companies going along with this rather than challenging cost increases.

A recent report by Private Healthcare Australia revealed that for prosthetics the prices charged for the same item are markedly different depending on whether it is for a public or private patient.

According to the report, a single chamber pacemaker costs $17,000 for a public patient and more than twice that,$42,920, for a private patient. A private patient (or their fund) is hit $9000 for an implantable cardioverter defibrillator, while the public hospital pays $2,200.

"These are telling examples of how longstanding flaws in the pricing system greatly inflate costs because they are being paid for by private insurance - which means by customers and taxpayers" Mr Yates said.

"It estimated that a 45 per cent reduction could be achieved in prostheses prices which would save the Australian health system $800 million in annual expenditure and translate into a premium reduction of 4.5 per cent, or savings of over $150 per policy.

"Similarly, hospital-level benchmarking by the Productivity Commission found that public prices were 48 per cent below those of the private sector.

"This is just one example and we suspect if you scratch the surface, similar overcharging will be exposed in other areas.

"It's the health system that's sick and needs urgent attention so private health insurance customers across Australia get a better deal.

"That's why it is welcome news today that the Health Minister, Sussan Ley, is finally pushing back and saying enough is enough; but the Minister will also have to get her department to come up with matching efforts by government to change pricing systems."

"I'd like to see the government refuse the requests for fee increases altogether and insurers and government work together to find better ways to provide value to customers and taxpayers."

Media contact: Ian Yates 0418 835 439, Olivia Greentree 0439 411 774.

COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.

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