By St.LukesHealth CEO Paul Lupo
The first quarter of the New Year is always a busy period for health insurers as members review their policy following the annual April 1 premium adjustment.
While the annual premium adjustments evoke strong reactions from media commentators, it is important to look at the drivers for such increases if we are to ensure the provision of health services is both affordable and accessible across the public and private sectors.
Health insurance premiums increase because the costs associated with members claims continue to rise. An increase in people’s life expectancy and the prevalence of chronic disease has resulted in more frequent usage of hospital procedures that come at a considerable cost.
With health CPI sitting at 3.2 per cent for the 12 months to September 2018, it is pleasing to see the private health insurance sector is able deliver its lowest premium increase across Australia in 18 years from April 1, 2019, at the average rate of 3.25 per cent.
In October 2017, the Australian Government Private Health Insurance Reforms were announced, with some notable changes from April 1, 2019.
The introduction of Gold, Silver, Bronze and Basic product classifications for hospital cover will be implemented from April 1. The aim of this is to make it easier for people to understand, compare and choose their health insurance product through the use of standardised clinical definitions that a product must cover to receive the classification.
All private health insurers are required to rename their existing products under these classifications.
If your hospital cover is labelled as Gold, you will be covered for the most clinical categories, while if it is labelled Bronze you will have mid-level cover with exclusions on some categories.
From a St.LukesHealth perspective, the organisation will only make minor changes to its products to ensure compliance with the reforms. If you receive advice from your insurer that your policy is being significantly modified under these changes, we strongly suggest you review your product to ensure you still have the appropriate level of hospital cover and that it is still providing you value for money.
Also from April 1, your private health insurer will no longer be able to pay benefits towards some natural therapies previously covered under General Treatment policy.
This was mandated by the Health Minister after the National Health and Medical Research Council found no clear evidence demonstrating the effectiveness of these techniques.
Questions have arisen about how this change will apply to professionals providing natural therapies. A good example of this can be shown where physiotherapists use Pilates as part of a treatment plan.
A private health insurer can lawfully pay benefit if a physiotherapist is providing this service to a patient within an accepted scope of practice – that is, a physiotherapist uses exercises or techniques drawn from Pilates as part of a treatment plan.
Remember if services are withdrawn from your health insurance cover, your insurer is required to notify you of the change.
Private health insurers are committed to finding more ways to improve the value proposition of products while ensuring that premiums remain within the members’ financial means.
Hopefully with these reforms, we can announce an average premium increase lower than this year next April.