By St.LukesHealth CEO Paul Lupo
On 13th October, the Federal Government announced what most believe to be the most significant changes the industry has seen in the last 20 years, aimed at improving affordability and encouraging greater youth participation into private health insurance. The changes impacting Tasmanians who hold private health insurance over the next 18 months relate to prostheses reform, which looks to address some aspects of affordability, and for young Tasmanians not holding cover, through discounts and reduced waiting times to access mental health services.
As a not-for-profit health insurer, St.LukesHealth welcomes the Federal Government’s efforts to reduce the cost of prosthesis to privately insured members, which is particularly relevant to Tasmanians. In 2017 prosthesis costs represented 14% of all hospital benefits paid by all health funds in Australia, and in Tasmania due to our ageing demographic this cost was 17%. This reform means that prices regulated by the Federal Government and charged by manufacturers of medically implanted devices will fall, with savings passed directly on by health insurance funds to members. Savings in 2018 are estimated by the Federal Government at $188m with full savings of $304m annually by 2020.
St.LukesHealth sees this reform as a good starting point if we are to address issues around affordability, but we believe this needs to go much further given that according to official data for 2014-15, the difference between what consumers were forced to pay for medically implantable devices in private hospitals was $729 million more than would have been the case if public hospital prices were applied. When adding procedures in day hospitals, as well as private patients in public hospitals, the industry believes this figure is projected to approach $1 billion in 2017-18. Therefore, we will continue to advocate on behalf of our members to right this inequity and assist health insurers minimise the extent of future premium increases.
On making health insurance more attractive for younger Tasmanians, the Governments reforms allow private health insurers to offer discounts of up to 10 per cent on hospital cover for 18 to 25-year old’s. In response to an increased demand for access to mental health services, changes to waiting period rules for hospital cover will mean younger Tasmanians can more easily access services when they most need it. This need was highlighted in the 2016 Tasmanian Population Health Survey that reported 13.7% of all Tasmanians reported very high or high levels of psychological distress, with most distress seen in younger Tasmanians aged 18-24 years.
In conclusion, the Federal Minister’s prosthesis reform is welcomed, but it needs to go further if we are to see sustained savings put back in the pockets of Tasmanian members, and a growth in the number of Tasmanians with private health insurance, which is good for the sustainability of the entire health system. In addition, from April 2019 the Minister has allowed health insurers to offer younger people discounts to encourage participation in private health, and importantly from April 2018, greater access to mental health services for which there is a growing demand. Overall these reforms are a good start and should be welcomed by Tasmanians.
Established in 1952, St.LukesHealth is a Tasmanian Not-For-Profit Health Insurer, with over 30,000 policies covering over 62,000 people Australia wide. To join, switch or have a cover comparison call 1300 651 988.