Private health leaves patient in the lurch
John Grech had been paying private health insurance premiums for 20 years when his doctor told him he needed to be assessed for surgery.
John Grech had been paying his health insurance premiums for 20 years when his GP told him he needed to be assessed for surgery.
A few hundred dollars and a raft of tests later, he was ready for the operation – until his surgeon informed him it would cost him almost $4000 for the surgery plus more for the anaesthetic.
“I was shocked,” said Mr Grech, who works in building services at Fairfax Media. “When I contacted my insurance provider, they looked it up and said my doctor wasn’t covered by them.”
John Grech: “They looked it up and said my doctor wasn’t covered.”
Photo: Brendan Esposito
Mr Grech is lucky. Despite the inconvenience and the cost of having to seek out a new surgeon, his surgery will be covered.
For some people, the restrictions on their policy mean they simply cannot get private hospital care.
Fewer than half of all private health insurance policies offer adequate cover for private hospital care, and many patients have no idea what their insurance includes, new figures show.
Private hospitals and doctors say private insurers are exploiting loopholes in a system that was meant to take the pressure off public hospitals, with many policies now covering patients to receive private care in only public hospitals.
Australian Private Hospitals Association chief executive Michael Roff said the government should stop providing rebates for insurance policies that did not cover private hospital care.
“The whole rationale of the rebate was to reward people who took care of their own healthcare costs … and to take the pressure off the health system,” he said. “Yet we are increasingly seeing people don’t get the cover that would enable them to use the private system.”
Mr Roff said the proportion of hospital policies providing full cover had fallen from 52.5 per cent to 46 per cent in the past three years.
“And that doesn’t even give us the full picture, because the number of policies with exemptions doesn’t tell us how many exemptions there are,” Mr Roff said. “We don’t know how many of these policies have 15 services excluded or only two.”
And a survey of 1500 privately insured people, commissioned by the association, found nearly 40 per cent did not know what their cover did and didn’t exclude.
It also found people reported feeling pressured to use their private cover in public hospitals.
Mr Roff said people were increasingly being excluded from having their surgery when their pre-operative assessment uncovered they were not covered by their insurance.
“Often they have so many exclusions that they can’t access a private hospital and can only use it in the public system,” he said.
Companies that advertised themselves as a way of choosing insurance often drove people towards policies with more exclusions and out-of-pocket costs. And some big companies were competing by encouraging their own customers to downgrade their cover, Mr Roff said.
“It’s extraordinary they are cannibalising their own products.”
Australian Medical Association head Brian Owler said policies that insured private patients in only public hospitals were junk policies and should not be allowed, and the active downgrading of private insurance was undermining its value.
In a speech earlier this month to the Ramsay Health Managers Conference, Professor Owler called for “strong and swift” intervention by the federal government.
“AMA members report that they often need to cancel booked procedures when it becomes apparent that the patient is not covered,” he said. “Commonly, patients believe they purchased cover and cannot recall being advised by their insurer that their policy had changed.”
In March a report by the Private Health Insurance Ombudsman found complaints about private insurance had increased, and most involved the quality of information provided about what was covered and the benefits that could be claimed.
Private Healthcare Australia was unable to comment before deadline.
Services excluded from policies
- Obstetrics and pregnancy services such as IVF 41%
- Hip and knee replacement 16%
- Eye and hearing services 7%
- Cardiac services 3%
Source: Australian Private Hospitals Association patient survey.