Greater transparency needed to help consumers debunk junk policies

Minister for Health Sussan Ley's statement regarding private health insurance policies.

Page last updated: 07 March 2016

PDF printable version of Greater transparency needed to help consumers debunk junk policies (PDF 213 KB)

6 March 2016

I’m deeply concerned at the current difficulty faced by consumers in comparing private health insurance policies and shopping around for a better deal is stifling innovation in the private health sector.

This is not surprising, with over 40,000 individual policies registered in Australia, some of which are clearly junk and not delivering the best value for consumers or taxpayers.

Instead of competition and consumer choice driving new, exciting and fairer health policies, we’re seeing tricky fine print regularly protecting the status quo.

I’m particularly concerned when I hear of patients unsure of what they’re covered for or how much they’ll be out of pocket, despite being a loyal customer for many years.

This is particularly the case when it comes to cheaper products at the lower end of the scale, where consumers are increasingly finding a large number of procedures excluded, yet they still have significant out-of-pocket costs as well.

These are not isolated views but regular themes shining through, as we continue to process more than 40,000 responses from consumers who flooded our online private health survey.

The overall view is that private health insurance is important to consumers but they want better value from their policies. The Turnbull Government is committed to delivering this.

I believe a more transparent private health system will, in turn, deliver better-quality products and prices for consumers by shifting the power-balance back in their favour.

A key part of this, is ensuring we have more-standardised levels of cover where consumers can easily understand and compare what they will and won’t be covered for and how much they will pay.

I am therefore investigating ways to ensure consumers can compare apples with apples when they shop around, as part of my broad-ranging reform discussions with the private health industry.

I also want to see low-value products called out for what they are – junk. It is essential the $6 billion taxpayer support for patients who take out private health goes towards delivering high-quality health care outcomes that actually take pressure off of the public system.

Improving the quality and transparency of private health insurance products also makes it imperative we undertake broader structural reform as well, such as addressing the disparity in the price of medical devices between public and private patients, in order to ensure we can also reduce pressure on premiums for consumers long-term.

To enact real lasting improvements for consumers, I consider it essential we have the entire private health insurance supply chain at the table. That is why I am actively and regularly consulting everyone from hospitals, device manufacturers, doctors and insurers, through to consumers and patients themselves, during this process to ensure we can develop a balanced package of sensible private health reforms.

In the meantime, while we continue this work and our reform consultations, if consumers want independent comparison advice free of commissions, please visit the Private Health Insurance Ombudsman's website.

ENDS

Media Contact: Steve Block 0428 213 264

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