Health insurance reforms may miss April 1 start date

The main pillar of the Morrison government’s health insurance reforms could miss the planned start date next April.

There are calls for a 24-month transition period to introduce the health insurance reforms.

The main pillar of the Morrison government’s health insurance reforms could miss the planned start date as insurers push for a 24-month transition period amid debate over the clinical definitions used to underpin the policy.

Health Minister Greg Hunt is determined to introduce a range of health insurance reforms on April 1, ahead of an expected mid-May federal election, and Labor has signalled health insurance policy will play a key role in its campaigning.

The key reform in a suite of new initiatives that are aimed at addressing affordability and transparency is the introduction of gold, silver, bronze and basic categories, but industry insiders have warned that the new categories could miss the deadline.

Medibank chief executive Craig Drummond said there was still work to be done on the categories.

“We haven’t yet got the final rules from the (health) department but we are expecting those imminently,” he said at Healing the System, an industry event hosted by The Australian.

“We also haven’t yet got the final date of implementation, ­although our current expectation is … hitting the market around July of next year.”

Rachel David, chief executive of Private Healthcare Australia, said if “push comes to shove”, she believed consumers could be ­selecting from gold, silver, bronze and basic health insurance policies on April 1, but she added that it was imperative there was the ­appropriate timeframe to ­imple­ment the changes.

“It is important that we do get this right. We don’t want to cause a situation where consumers are caught between two systems,” Dr David said.

The Australian understands that the industry has requested a 24-month transition period in which to implement the categories. “I believe the funds will be ready by April 1 but the decision to have a longer transition period is up to the government and we will work with whatever the government decides,” Dr David said.

A spokeswoman for Mr Hunt said the implementation of the new product tiers and standard clinical categories would occur as planned from 1 April.

She said there would be no delay to the ­implementation of the reform.

Dr David added that the hardest part of the reform was not the new tiers but the clinical definitions. She said all involved had underestimated the complexity of the process.

“The biggest issue we had in the process was health professionals saying they wanted their medical procedure covered in all tiers and in some cases they were talking about procedures that ­involved $70,000 in prostheses costs, which could not be put in silver when it was the price point of gold,” she said.

“There was a lot of naivety in even the health professional population about the cost of some of the procedures they are performing.”

Members Health Fund Alliance chief executive Matthew Koce backed the need for a 24-month transition period, saying that period would provide consumers with the time they needed to assess products on the market and smoothly migrate to the policy that best met their individual needs and circumstances.

“It is important this is not rushed and that consumers have time to shop around,” he said.

The government is yet to finalise the rules underpinning the legislation but insurers will have to include in their applications to raise premiums next year a statement on the benefit of the reform.

According to Department of Health paperwork sent out ­recently, insurers will have to ­detail their plans for the categories and help the government ­explain any changes.