Health insurers call for national reforms

Health insurers call for national reforms | Insurance Business Australia

Life & Health

Health insurers call for national reforms

Four key recommendations outlined

Life & Health

By
Roxanne Libatique

Members Health Fund Alliance (Members Health) has called for sweeping reforms aimed at improving the accessibility, affordability, and transparency of healthcare services in Australia.

These recommendations were part of a new report released by the not-for-profit health insurance sector.

Contributions of not-for-profit and member-owned health insurers

The report, titled Economic and Social Impact of the Members Health Funds of Australia, outlines the contributions of not-for-profit and member-owned health insurers, which provide coverage to more than 5.3 million Australians, including over 1.1 million people in regional and remote areas.

Collectively, these 24 insurers represent 80% of the private health insurance market, contributing $21.8 billion annually to the economy and supporting over 155,000 jobs. Additionally, they facilitate access to 6.4 million hospital bed days, 510,000 elective surgeries, and 37.8 million extras services every year, it was outlined.

Matthew Koce, CEO of Members Health, emphasised the sector’s historical and ongoing contributions to Australia’s economic and social wellbeing.

“From Australia’s earliest beginnings, not-for-profit and member-owned health insurance funds have stood alongside families – from the cities to our regional and remote areas – playing a vital role in healthcare delivery and the nation’s economic and social wellbeing,” he said.

“Good health is fundamental to productivity, wellbeing, and economic prosperity,” he said. “Given cost-of-living pressures and long public hospital waits, there is an immediate imperative to further improve affordability, accessibility, and consumer empowerment for Australian families.”

The report identified four specific policy reforms aimed at improving the affordability of private health insurance and reducing strain on the public healthcare system:

Restore the government rebate on private health insurance premiums from below 25% to 30% to lower costs for policyholders.
Enforce greater transparency regarding pricing and performance of hospitals and clinicians to allow consumers more informed choices when selecting healthcare providers.
Remove the government restriction preventing health funds from covering out-of-pocket expenses for GP visits, making primary care more affordable and reducing hospital admissions.
Exempt private health insurance premiums from the Fringe Benefits Tax to provide employees with faster access to care, which could enhance economic productivity.

Koce emphasised the importance of empowering consumers with the information necessary to make informed decisions about their healthcare providers.

“We want health insurance members to be in control of their healthcare, and that can only occur if consumers are empowered with access to information on price and performance of healthcare providers,” he said.

In addition to the Members Health report, the Australian Prudential Regulation Authority (APRA) published its latest figures on the performance of the private health insurance sector. According to the report, the total insurance revenue reached $7.7 billion in the June quarter, but the insurance service result dropped sharply to $109 million, down from $632 million in March 2024.