Sue Dunlevy: Health shake-up won’t solve doctor greed

Tens of thousands of health fund members are left with medical bills of up to $70,000 their funds won’t cover because greedy doctors charge exorbitant fees, and health funds charge excess and co-payments when you go to hospital, Sue Dunlevy writes.

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If people weren’t already questioning the value of private health insurance policies, chances are they will this year.

There is no doubt reform of policies and steps to make them easier to understand and compare were needed but the transition to a new tiered policy system isn’t going to be easy.

Health insurance policies will definitely become easier to compare when the Gold, Silver, Bronze and Basic ­reforms take effect but they will cause major disruption, anxiety and shrink the value of some cover.

From April many polices will have to be renamed, some will be reformulated and members may find their product is no longer ­adequate for their needs.

Just last year, for example, health fund BUPA outraged its members by axing benefits for hip replacements, cataracts and pregnancy from 700,000 of its budget products in anticipation of the new reforms.

Is health insurance even worth it? Picture: iStock

Analysis by consultancy firm Deloitte for the government reckons over coming years all health fund products will be shaved back to offer the bare minimum of benefits required under the new categories.

The reforms will focus ­attention on the burning question of whether private health insurance is actually worth the money when we have a universal, free public hospital system.

Health fund premiums have surged above the rate of inflation for decades making the product so unaffordable that even with a $6.4 billion government subsidy and a tax penalty that forces people to buy it, thousands of people are dropping out every few months.

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Health fund membership peaked at 47.4 per cent of the population in June 2015 but coverage fell to just 44.9 per cent of the population in September last year.

People with private health cover often can’t afford to use it because, bizarrely, it does not have to cover the full cost of their treatment.

Tens of thousands of health fund members are left with medical bills of up to $70,000 and beyond that their funds won’t cover because greedy doctors charge exorbitant fees, and health funds charge excess and co-payments when you go to hospital.

Greedy doctors can still charge massive fees even for people with health insurance. Picture: Generic image

We are in an incredulous situation where some medicos are encouraging privately insured cancer patients to raid their superannuation to pay medical bills their insurers won’t ­rebate.

The medical greed has become so great it is threatening to destroy private medical practice ­because people are refusing to use their health insurance.

The proportion of women giving birth in the private system plunged from 30 per cent in 2008 to 26 per cent in 2016. Many privately ­insured women are using the public hospital system to avoid pregnancy booking fees of up to $13,000 charged by obstetricians who now fear their private practices are under threat.

Then we have the crazy situation where health funds are charging families up to $3000 a year to cover them only for treatment in a public hospital, something they are entitled to for free under Medicare.

The so-called junk policies are being subsidised by taxpayers via a government tax subsidy worth up to $800. And when health fund members go to use some of these policies they have to pay an excess of $500 a year when they could get the care for free if they didn’t use their health cover.

Labor has promised a Productivity Commission inquiry into private health insurance if it wins the election. It is long overdue.