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PHIIA Submission to Senate inquiry into PHI affordability & Value Aug 2017

PHIIA Senate Inquiry submission final

Below is a brief extract from the opening comments to the submission. It’s hoped we may be invited to appear at the public hearings scheduled for Sydney on Oct 31. Feel free to read the whole document it is not too long.

Extract from opening comments:

All members work within the terms of our self-regulatory binding code of conduct which ensures transparency, non-conflicted remuneration and adequate choice to build confidence and capacity with consumers.

The ACCC Private Health Insurance Report 2015-16states that 40% of consumers who switch their health cover do so through the commercial comparators.

PHIIA’s own data suggests that another 30% of new entrants and switchers do at least some research via a comparator service before buying directly from a fund.

We believe that the myth that commissions/fees paid to comparators somehow inflate the premium price deters some consumers from purchasing from the comparator and instead of going direct to the fund. In fact, there is no additional cost to the consumer by using comparison services. Their advice is provided to customers free-of-charge and the policy price is the same whether they go via a comparator or buy direct from a fund.

We would like to address a similar misapprehension included by BUPA in reports of their submission to this inquiry. Bupassubmission claimed comparators commissions somehow inflate the cost of all premiums for all consumers. In reality the comparators are just another sales channel, such as TV, Facebook, Google etc., among various marketing costs. In many instances, the cost of member acquisition via comparison sites is more cost-effective particularly for smaller funds than undertaking their own marketing activities and sales channels.

While not all funds choose to make their policies available to customers via commercial comparison sites, many funds do, including several of the largest and most well-known funds. Smaller challenger brands especially make effective use of comparison sites low barrier-to-entry marketing models.

In response to calls for further regulation of the intermediary sector, we would like to highlight the sector already has considerable oversight. For exampleiSelect is regulated by a number of government agencies including ACCC, APRA, ASIC and also a fully compliant member of PHIIA and are also signatory to our Code of Conduct.

We believe our self-regulated system empowers consumers and drives competition in the market in ways which enhance, rather than detract, from the value and affordability of PHI.

However, there are two barriers in particular which we believe impede the smooth flow of these positive functions. More detail is provided below against the relevant terms of reference.

The first involves the handling by the health funds of the switching process and delays above and beyond what a reasonable consumer might expect. There are also issues in terms of behaviour and statements of so-called save teams that aim to retain customers who have already elected to change provider.

The second revolves around access to data and the inability of PHIIA members to get up-to-date, detailed information on all policies, including those no longer being marketed.

Given fast-moving technological developments, it’s understandable and desirable that any regulations insist this data is available for interested third-parties in portable and readable electronic formats that facilitate genuine comparison in the benefit of customers.



Calls to regulate health insurance will only drive up costs of consumers and reduce their choices

Media Release: 21/8/2017


Calls to further regulate private health insurance by the AMA could increase the costs of cover to consumers and reduce their power to choose more suitable policies.


The industry body for comparison services, brokers and agents providing guidance around Health Insurance, says given the focus on affordability it is not in consumers interests to restrict options.


Christopher Zinn, CEO of PHIIA (Private Health Insurance Intermediaries Association), says the AMA and doctors might instead take some steps themselves to help patients to reduce costs and navigate the system. This might include discouraging booking fees and other forms of large medical gaps.


He says many consumers consciously choose lower cost insurance to allow them to retain some cover, and are well aware of what is included and what is not.


What is critical is that consumers regularly review their cover to ensure that it is appropriate for their circumstances. We agree with the AMA that it is plain wrong for seniors to be covered for pregnancy but not joint replacements or eye surgery.



But to suggest as the AMA have done the need to regulate minimum levels of cover, including those for older Australians, will only further push up the cost of premiums, he says.


Comparison services who are members of PHIIA report selling very small numbers of the junk policies and where they do making the consumer fully aware of their limitations.


Instead of the blame shifting stakeholders in private healthcare should work together to help increase its value to consumers and their knowledge of methods to pay for it.


PHIIA suggests the AMA might:


Encourage GPs to advise patients to contact their funds as soon as a referral to a healthcare professional that may result in a hospitalisation is made.


Doctors might review their booking fees, and charges in excess of the agreed fees for Medicare and the health funds, which can impact consumers far more than exclusionary policies.


Doctors should make information about their services and the amount they charge much more freely available to empower consumers and enable market forces.


Of course theres a need to reform Private Health Insurance to restore confidence and help consumers make clearer decisions but blanket regulation will work against the interests of the most vulnerable consumers and that is hardly what the doctor should order.







PHIIA, the Private Health Insurance Intermediaries Association, represents those who make recommendations to the public around policies. It enforces a consumer code of conduct to ensure transparency, non-conflicted remuneration and training.


PHIIA recommends that consumers only use comparison services that are signatories to the code


Media inquiries:


Christopher Zinn Tim Allerton

0425 296 442 City PR 0412 715 707