Junk health fund policies may survive reforms

MAJOR reforms to health fund policies are looming as the government tries to rein in health fund premiums.

Health insurance reforms may save junk policies. Picture istock

JUNK health fund policies that only cover public hospital treatment are likely continue under the government’s health fund reforms because axing them will increase premiums by up to 16 per cent.

But there could be new restrictions on using the policies in public hospitals with patients required to sign contracts with the hospital 24 hours before they receive treatment.

Health funds say public hospital only policies are valuable for pensioners and young people who can’t afford comprehensive policies but want to choose their own doctor.

“The real issue is people knowing what they are buying and we (health funds) have agreed to contribute to a process that ensures that,” Private Healthcare Australia chief Rachel David says.

People who have these policies would face a 16 per cent premium rise if they had to upgrade to the next level of health cover that insured them in private hospitals, she said.

Health funds to explain better what policies cover. Picture Thinkstock.

A spokesman for Health Minister Greg Hunt said the minister has “categorically ruled out proposals that would increase the cost of private health insurance premiums”.

“We are also working on new arrangements to provide consumers with simplified information on policies. This will allow easier comparison between policies and increased protections for policyholders,” the spokesman said.

Opposition health spokeswoman Catherine King said it was “another broken election promise from a Government that can’t be trusted on health.”

Funds are also resisting the Australian Medical Association’s push to have obstetrics care covered by all health fund policies.

AMA president and obstetrician Dr Michael Gannon agrees making obstetrics cover compulsory would increase premiums but says people are sick of buying health fund policies and finding out they don’t cover the treatment they need.

The government is looking at simplifying health fund policy choice by categorising tens of thousands of different policies into Gold, Silver and Bronze categories.

Health insurers are arguing for a separate fourth category of “basic table” policies that only cover treatment in a public hospital.

The funds are blaming everyone but themselves says AMA president Dr Michael Gannon. Picture: Ray Strange.

If the government retains junk policies it could be breaking a 2016 election promise.

Former health minister Sussan Ley made a pledge to axe the policies in the government’s “Plan to ensure private health insurance delivers value for money”

The government is also examining new restrictions on using health insurance in public hospitals.

BUPA has asked the government to make it impossible for a public hospital to charge a health fund unless the patient signs a contract 24 hours before admission outlining the benefits they will receive.

BUPA wants restrictions on public hospital claims. Picture iStock.

In its submission to the government’s health fund reform process the fund says they should not have to pay if a health fund member has no meaningful ability to choose their own doctor.

The government is looking at slashing the money it provides to states to run public hospitals by the amount they gain in revenue from private insurers.

Originally published as Junk health fund policies may survive reforms