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 coverage 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 coverage 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 has 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 that are members of PHIIA report selling very small numbers of the “junk policies” and where they do, make sure the consumer is 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 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 there’s 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 about insurance 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