Industry sets agenda for urgent reform

The value of health insurance has never been more important in our post COVID-19 world.

While it may be argued that the pandemic has caused people to re-evaluate, cancel or suspend their insurance due to the financial pressures brought upon by COVID-19, the opposite is in fact true.

About 13.74 million Australians rely on health insurance across the nation, with half of this population having a disposable income under $50,000.

As a Tasmanian not-for-profit health insurer, we are experiencing this firsthand.

In the 12 months to December 2020, Australian Prudential Regulation Authority data shows that St.LukesHealth grew by 6.14 per cent, compared to the Tasmanian industry of 1.88 per cent.

No doubt the swelling of public waiting times for both outpatient appointments and elective surgeries post COVID-19 have caused an increased number of Tasmanians to seek peace of mind for themselves and their families, as have the introduction of benefits for telehealth services and services provided in the home.

But more than ever, as an industry, we are aware that affordability, access to medical services and treatment continues to be a barrier for many people accessing care. St.LukesHealth will continue to advocate on behalf of its members and Tasmanians to improve this.

As a member-centric insurer, St.LukesHealth will continue to give back to members paying 93 cents in benefits for every dollar of contribution received. We have also deferred the annual April premium increase for three months to provide financial relief to our members who are still feeling the effects of COVID-19.

The Australian health insurance industry has set its agenda for the year and has called for urgent reforms to three key areas where savings can be made, helping to reduce the premium amount a member will pay in future years.

These areas are:

  • Reforming Prostheses: Health insurers will be forced to pay more than $10 billion for medical devices over the next five years if the Prostheses List and its regulatory arrangements are not amended. The Prostheses List sets prices for more than 11,000 items with some items highly priced in our nation compared to other countries. Our Tasman Sea neighbours pay less for the same piece of equipment. For example, one bare metal coronary stent is $989 on Australia’s Prostheses List, 51 per cent more than the New Zealand price of $439.50 (NZ$465). This also includes holding multinational medical device companies to account.
  • Restore the health insurance rebate to 30 per cent: We cannot continue to put more pressure on the health system – both public and private - and as an industry we have called on the Australian Government to restore the rebate back to 30 per cent over the next four Budgets. Restoring the rebate for low and middle-income Australia would make premiums more affordable for people who are paying for the cost of their own healthcare, as well as reduce the pressure placed on the public health system.
  • Removing unwarranted and outdated regulation: Health insurance is a highly regulated industry that includes limitations on what benefits we can pay and provide a member. Currently, insurers can only pay hospitals for a range of procedures that are obtained while admitted as a patient in hospital. Many of these services – such as rehabilitation and wound management could be performed outside the hospital setting and in your home, ensuring shorter hospital stays and freeing up beds for those who need it.

There is no doubt we have a hard road ahead of us to enforce this change within the Australian government, but it is necessary if we are to continue to provide a highly regarded private-public healthcare system.

I am optimistic that through these changes, we can create a state where our communities flourish with good health because it is accessible and affordable…Not just physically and mentally, but economically too.

Paul Lupo, St.LukesHealth CEO
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