Health insurers to pass $86m in device cuts to members

Health insurers have welcomed $86 million in medical device cuts.

Health insurers have welcomed $86 million in medical device cuts and promised to pass the savings on to members.

Under long-awaited reforms to the Prostheses List, which dictates how much insurers pay for health fund members to receive a range of surgically implanted devices, the federal government will first target those areas with the most inflated prices.

Health Minister Sussan Ley has taken advice from an industry working group, which highlighted how the regulated prices of cardiac devices, intra-ocular lens systems, hips and knees were “significantly higher, in many cases, than market prices based on available domestic and international data”.

After The Australian today revealed the scale of the cuts, Ms Ley said she expected “every dollar of that $86 million” to go towards making insurance cheaper for consumers.

But Ms Ley avoided saying how much the cost of premiums would change, as did industry body Private Healthcare Australia, despite describing the cuts as a win for consumers.

“Health funds have guaranteed every cent saved will be passed on to consumers in future premium rounds, significantly reducing the price people would otherwise have paid,” PHA chief executive Rachel David said today.

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Legislating to cut the price of cardiac devices and intra-ocular lenses by 10 per cent, and hip and knee prostheses by 7.5 per cent, is expected to save insurers $86m in the first year and $394m over five years.