Patients pay a difference of more than $ 800 for exactly the same medical procedures depending on their private health insurance company, a new report from the Australian Medical Association shows.
Different insurance rebates for the same procedure result in some patients paying $ 800 more for a coronary bypass, nearly $ 600 more for a knee replacement and more than $ 500 more for a birth, according to the report released Tuesday.
The President of the Australian Medical Association (AMA), Dr. Omar Khorshid, said navigating insurance policies remains “confusing and complex” for patients.
“Benefits paid by insurance companies for the exact same service vary considerably – our sample shows that the smallest variation across a handful of insurance companies was 8%, but goes as high as 46%,” he wrote in a preface to the report.
“This amount of variation is why the AMA was urged to get a minimum amount back to the healthcare consumer for every premium dollar paid. There must be a standardized return that is higher than the current average for the private health insurance industry right now.”
The report found that most complaints about private health insurance were about failure or delay in payment of benefits or disagreements over the difference paid; premium increases; questions about membership; waiting periods for pre-existing conditions; and service, including information provided that did not meet patient needs.
“Incorrect or inappropriate information can lead to people misunderstanding what they are covered for, resulting in insured patients facing unexpected expense costs,” the report found.
“This can be especially problematic when the advice from an insurance company is given orally or in person. In addition, online details of a policy or in brochures can be challenging to understand for most consumers.”
Reforms aimed at making private health insurance less confusing for patients proved to have failed. In 2019, private health insurance was labeled as gold, silver, bronze or base, with “plus” versions of these categories also available. Gold policies represent the highest level of coverage and basically, the lowest, with the labels created to help consumers more easily identify what level of coverage they need to avoid junk policies.
But a Choice review found that more than 215 silver and silver-plus insurance policies cost more than gold policies from competitors, meaning consumers are still confused and paying more for less coverage.
The AMA has encouraged people to review their private health insurance policies to ensure they meet their needs.
Doctors should also be held accountable, said Charles Maskell-Knight, a former senior public servant in the Commonwealth Department of Health and private health insurance experts.
“Most insurance companies have the same no / known gap schemes available to doctors across the ACT and NSW,” he said.
“But the report card shows that in almost all cases, there is a much lower share of no gap services in ACT compared to NSW, reflecting the ACT doctors’ charging practices.”
He said the AMA report had also “cut across” the relationship between intermediate payments and premiums.
“Eliminating gap payments would require medical benefits paid by insurance companies to increase by about $ 750 million, provided doctors did not increase their fees in response,” he said.
“To fund this, insurers will have to increase hospital coverage premiums by about 4% on top of any other premium increases.”
Australian Prudential Regulation Authority member Geoff Summerhayes warned in 2020 that only three private health funds will be financially viable within two years if the industry does not take urgent action to break out of its “death spiral” caused by young people giving it up private health insurance as it offered them little value for money. This means that those with insurance tend to be older people with more expensive medical requirements.