It's not mental health driving gold-tier woes

HCF is rightly concerned about the sustainability of Gold hospital cover, but the problem is closer to home. Product design and cost is driving customers away from Gold policies, leaving mental health patients with nowhere else to go.

Silver-Plus includes some hospital services associated with Gold, but not mental health. This concentrates mental health patients into the shrinking Gold pool.

It also creates meaningless statistics and misleading headlines, as your article demonstrates 'HCF says soaring mental health claims driving up premiums', October 20.

The reported figure that mental health accounts for 90% of HCF's Gold-tier claims bears scrutiny. It could reflect the composition of members remaining in Gold, rather than mental health disproportionately driving hospital expenditure, particularly as they represent 5% of total claims.

In fact, the Private Hospital Data Bureau Annual Report 2024-25 shows mental health hospital charges, as a proportion of total private hospital charges, declining from 5.14% to 5.11% over 2020-21 to 2024-25, while the number of mental health episodes fell by 13%.

While the average cost of mental health admissions has risen, this does not mean that mental health is becoming a disproportionately large driver of total hospital expenditure or that it is the primary cause of Gold premium pressures.

Reform requires examination of product design and risk equalisation, not blithely attributing Gold affordability to mental health claims.

Commercial behaviour inevitably responds to the incentives created by policy frameworks. Without structural reforms, the system risks Gold cover becoming increasingly unaffordable for people who need mental healthcare.

Brett Heffernan, CEO, Australian Private Hospitals Association, Canberra. Published in the Australian Financial Review on 27 October 2026.

Previous Letters to the Editor:
20/10/2026 Don't spare insurers in health cost debate