Insurers may force older Australians to pay more for common medical procedures.
A leaked report on private health insurance recommends that procedures such as cataract surgery, and hip and knee replacements be quarantined in more expensive policies, hitting older Australians in the hip pocket hardest.
Older Australians, who overwhelmingly need these sort of procedures, will therefore need to upgrade to more expensive policies to be covered, if the proposals go ahead..
Almost 70 per cent of the 5000 respondents to YourLifeChoices’ recent Retirement Matters Survey have private health insurance. Among the general population, just 46 per cent of Australians are covered.
However, one in five survey respondents said they were unlikely to be able to keep health cover for the rest of their lives.
With healthcare costs nominated as the single biggest drain on respondents’ savings, it is likely that future increases in premiums will persuade many older Australians to drop health cover.
Almost three-quarters of uninsured survey respondents said they had once had private health cover.
Modelling conducted by accountancy firm Deloitte for the Health Department suggested some premiums could rise by around 12 per cent under the new regime, according to The Sydney Morning Herald.
The Government has rejected this saying that any changes to premiums would cost between zero and 0.3 per cent more.
The reforms, due to be introduced in April 2019, are meant to standardise insurance policies across the sector so consumers can more clearly compare what is on offer
Insurers will be required to offer four levels of cover – basic, bronze, silver and gold, which will have the highest level of cover at the greatest cost.
Health Minister Greg Hunt said the Deloitte report was merely “input” to inform deliberation by the Private Health Ministerial Advisory Committee, which is assisting in drafting the insurance reforms.
“(The reforms) deliver more support for patients seeking cover for mental health, discounts for young people of up to 10 per cent and better coverage for those in rural and remote areas,” Mr Hunt was quoted as saying.
“It does not change existing policies but, as the public has long demanded, merely categorises them for simplicity.”
However, Grattan Institute health economist Stephen Duckett said if the modelled 5.6 per cent (before inflation, including inflation it is 12.3 per cent) premium rise for households with “medium”, soon-to-be silver, policies came into effect it would be “significant”.
“Those [affected] families are going to have to make a decision, and they might drop their level of coverage down to bronze or drop out altogether.”
Australian Society of Ophthalmologists president Peter Sumich told The Sydney Morning Herald the proposed changes were driven by the health funds and continued a trend of policy exclusions with no commensurate benefit from lower premiums.
“The expert actuarial analysis they perform always ensures that they benefit from any adjustments,” Dr Sumich said. “The illusion of improvements is like the 'shell and pea' game where the huckster keeps moving the shells but the pea remains hidden.
“… the gold products they offer for cataract are no better than the old ones despite the money they have saved by excluding cataract from lesser policies,” he said.
Will you keep up your private cover if the cost of your policy increases? Will you upgrade from your present insurance in order to benefit from the extra cover in the more expensive policies?