Medibank's premium return welcome – but billions still outstanding

Tuesday, 29 June 2021

Medibank's premium return welcome – but billions still
outstanding
Australian private hospitals have welcomed Medibank's move to return $105 million in premiums to two
million members, but billions of dollars in 'deferred claims liability' remain hidden in private health insurer's
coffers.

Australian Private Hospitals Association (APHA) CEO Michael Roff said it was good to see Medibank make
good on its promise to return unspent funds, now the rest of the industry needed to step up and do the
same.

"At the end of March 2021 there was $1.8 billion of unspent members' funds sitting in health insurers'
accounts – unchanged from December 2020. While some insurers have made moves to return members
unspent funds, too few have done so," Mr Roff said.

"We have heard some of the large insurers suggest only the not-for-profit funds were in a position to return
unspent premiums. Medibank is a for-profit insurer and their actions demonstrate that some insurers are
making up excuses not to return cash to their members. It's time all private health insurers met their
obligations to their members. At a minimum, they should publicly declare how much in deferred claims they
are holding and outline a plan to pay it back."
Mr Roff said that insurers had been able to accumulate so much money because elective surgery was
being turned on and off through various state lock downs during the pandemic.

"We had the National Cabinet mandate a stop on elective surgery at the start of the national lock down in
2020. That was due to a shortage of personal protective equipment (PPE) and a belief that significant
hospital capacity would be required to treat COVID patients. Issues with PPE were resolved last year and
today there are only 58 COVID patients in hospital across the entire country. Despite this, some states
have imposed elective surgery restrictions almost as a matter of course when announcing lock downs –
however short.

"There is no doubt there is enough capacity in the health systems across states and territories for elective
surgery to continue throughout any future lock downs. Procedures subject to restrictions include cataract
surgery that impacts sight and total hip and knee replacements – vital for movement. While not directly life
threatening these conditions are debilitating and affect the quality of life of people waiting for surgery.

"We estimate there were 350,000 episodes of care that did not take place in private hospitals in 2020
alone. Surgical restrictions must stop if we are ever to address the backlog of surgery," Mr Roff said.

-ENDSMedia contact: Frith Rayner, Director Communications and Marketing, 0413 971 999

Level 3 /11 National Circ, Barton ACT 2600. PO Box 4502, Kingston ACT 2604. [T] 02 6273 9000 [F] 02 6273 7000
[E] [W] www.apha.org.au [FB] ValuingPrivateHospitals [Twitter] @priv8hospitals
ABN 82 008 623 809

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