![[APHA]](/images/logo_apha.svg){kind=logo}
HEALTH insurers are quick to deflect and point the finger at everybody else. Claims that doctor out-of-pocket costs have soared in the last five years are a genuine concern. But the insurers have an even bigger case to answer.
"A massive 8.7 million people with hospital insurance policies, or a record 69.5% of all hospital-insured people, now have exclusions, restrictions or limitations in their cover," APHA CEO Brett Heffernan explained. "That's up 30%, or two million people, in those same five years.
"Patients are getting caught out paying more for their health insurance each year but getting less cover for it. In many cases, they just don't know what they're getting or, more to the point, not getting in their health insurance.
"It's deliberately confusing, jargon-laden and designed to entrap. Most out-of-pocket costs are due to insurance policies that are not transparent and do not cover patients adequately.
"To be clear, there are no out-of-pocket costs for private hospital stays. That's what insurance is for. The usual gaps patients cop are due to surgeon, anaesthetist or other specialist fees being above the Medical Benefits Scheme threshold. The MBS hasn't kept pace with rising costs for a decade.
"It is a serious concern, especially when some charge exorbitant amounts compared to others. But the real issue on gap payments lies in the design of private health insurance, which typically does not cover common procedures, or only offers partial coverage, leading to high and unexpected out-of-pocket costs.
"There are suggestions the insurers are encouraging this trend as a means of reducing claims costs.
"To increase private hospital use and ease pressure on the public system, insurance products must be reformed to be more comprehensive, transparent and user-friendly.
"Private hospital admissions have increased 3% over the last year to over 5.14 million admissions, yet private hospitals face an existential crisis. Why? Clearly, it has little to do with volumes but rather poor payments.
"Data from the Australian Prudential Regulation Authority (APRA) shows that in 2023-24 and 2024-25 health insurers only passed on 84% of the premiums they received from their customers. The rest, a massive 16% of the premiums families pay, they keep for their own purposes.
"In 2024-25 alone this saw the health insurance companies bank $2.13 billion in after-tax profits, while also siphoning $3.4 billion in so-called 'management expenses'. That's a staggering $5.53 billion from the premiums mums and dads paid in just one year.
"Amid the insurance policy pitfalls, lack of transparency and blatant profiteering, private health insurance is becoming less reliable and less fit-for-purpose."
-ENDS-
Previous Media Centre:
23/10/2025 Prioritise public patients in public hospitals: peak bodies