Private health insurance affordability issue: new APRA data

Tuesday, 18 August 2020

Private health insurance affordability issue: new APRA data
Private health insurance participation has continued to decline, the latest data shows, making a further
case for reform of health insurance policy settings, says Australian Private Hospitals Association (APHA)
CEO Michael Roff.

The Australian Prudential Regulation Authority (APRA) June quarter data released today shows the
percentage of Australians with private health insurance has declined again to 43.6 percent, down from 47.3
percent just five years ago.

Mr Roff said the Federal Government should consider a range of measures in the upcoming Budget to
address the significant affordability issues of private health insurance.

"There has been a further decline in membership and with increasing pressure on personal finances from
increasing unemployment, particularly for young people and women, the Government needs to act to
address affordability concerns so people can continue to access private hospitals when they need them,"
he said.

"APHA proposes restoring the health insurance rebate to the original 30 percent for low income families.

This income group includes many elderly Australians who rely on access to private hospitals to avoid
lengthy public hospital wait times. If they exit private health insurance, public hospital capacity will be
quickly overwhelmed."
Mr Roff said consideration should also be given to extending the amount of time young people can stay on
their parents' private health insurance cover and adjusting the Lifetime Health Cover settings.

"We know young people have been particularly hit by the pandemic, through job losses and likely future
loss of opportunity. A small extension in the amount of time they can be covered on their parents' health
insurance will mean fewer are lost to the system overall.

"The Lifetime Health Cover loading is also overdue for review. The loading is applied to premiums for every
year a person fails to take up insurance after their 31st birthday. Rather than encouraging take up, it is now
deterring Australians from investing in insurance past that milestone birthday.

"While this is a complex area to reform, APHA thinks options including adjusting the age the loading takes
effect, adjusting the penalty level or allowing an amnesty period are all possible changes that could have a
positive effect on this policy," he said.

Whatever measures are taken to improve affordability in private health insurance, Mr Roff said they need to
be considered as a matter of urgency as a tidal wave of elective surgery waiting lists is about to hit public
hospitals.

"Today's data shows there were more than 230,000 private patient episodes put on hold due to the
pandemic, on top of deferred public patient care – an indication of how much the health sector will have to
make up in the near future.

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

"There are estimates the backlog in elective surgery resulting from COVID-19 surgical restrictions could
take years to clear, even with the full capacity of the public and private systems. We need to urgently
address private health insurance affordability to ensure Australians can continue to access private hospital
services because the waiting times in public hospitals will just be too long," he said.

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

The Australian Private Hospitals Association (APHA) is the peak industry body representing the private hospital and day surgery
sector. The private hospital sector treats 3.73 million patients a year, including treatment of more than a third of chemotherapy, 60
percent of all surgery, 74 percent of all elective musculoskeletal surgery and 79 percent of rehabilitation.

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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