AMA's Report Card Warns Aussies to Know Their Insurance Product

22 March 2016
The Australian Medical Association (AMA) has released its 206 Health Insurance Report Card, warning Australians to know what they’re signing up for.

AMA President, Professor Brian Owler, said the aim of the Report Card is to provide Australian families – who contribute a substantial proportion of their household income towards private health insurance – with clear, simple information about how health insurance really works.

“The AMA wants Australians to know their insurance product – and know it thoroughly,” Professor Owler said.

“With the cost of private health insurance constantly rising, and with private health insurers regularly changing what is covered and not covered by their products, the AMA believes it is important that families and individuals are better informed about the health insurance cover they are purchasing.”

Some health insurance policies under fire

The Federal Minister for Health, Sussan Ley, has been on somewhat of a crusade against health insurers recently, with “junk” policies particularly in her sights.

“I’m deeply concerned at the current difficulty faced by consumers in comparing private health insurance policies,” she said recently.

“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.”

The AMA’s Report Card made a similar finding.

“Our Report Card shows that there are a lot of policies on offer that provide public hospital only cover,” said Professor Owler.

“These are better known as ‘junk’ policies because they do not support patient choice of doctor or timing for health services or procedures. There are also a lot of policies on the market that will not provide the cover that consumers expect when they need it.

“If people have one of the junk policies, the AMA urges them to consider carefully what cover they really need.”

Professor Owler said that sometimes policies have misleading names, implying that they will provide a very high standard of benefits but, in reality, they fall into the ‘basic’ category and only provide a basic amount of benefits.

The AMA hopes that the AMA Private Health Insurance Report Card 2016 – the first in an ongoing series – will provide consumers with useful information about private health insurance that will allow them to choose the policy that best meets their needs.

The AMA Private Health Insurance Report Card 2016 is at

HIF rejects “junk” description

Leading national health fund – Health Insurance Fund of Australia (HIF) – has pointed out that basic level policies have been created in response to significant demand from those wanting basic cover.

“(The are) created in response to significant demand from prospective and existing members who consider themselves fit and healthy but just want a relatively lower level of hospital treatment cover that is affordable to them, so that they could be covered in case an accident happens (they don’t think there is much chance of them getting sick), to avoid paying the Medicare Levy Surcharge; and/or to ensure that they don’t have to pay the Lifetime Health Cover age loading at a later date if they decide they need a comprehensive level of hospital cover when they’re older,” said HIF Managing Director Graeme Gibson.

“Only 4 per cent of our members are covered by (our basic policy) although 71 per cent of them have also taken up a separate Extras cover for treatments like dental, physio and chiro, quit smoking, weight loss and others,” he said.

“I think this indicates we are meeting consumer needs and/or preferences and giving them affordable choices.

“Essentially by choosing this cheaper product before age 31 now, it will save them paying the government’s loading later on in life.”

Private health insurance important to consumers

Ms Ley has been conducting health insurance roundtable discussions, consulting all groups affected by the industry.

“To enact real lasting improvements for consumers, I consider it essential we have the entire private health insurance supply chain at the table,” she said.

“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.”

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