Australia’s private health insurers paid out $5.4 billion in benefits between April and June despite the challenging operating environment under COVID-19 restrictions.
The latest quarterly APRA data released today reveals health funds paid out an additional $100 million in claims on the previous March quarter. Meanwhile, health fund premium revenue fell 1.4 per cent quarter on quarter, and profit margins shrunk to -0.4 per cent – the lowest result in at least 12 years, according to the prudential regulator.
“The data is proof that health insurers are still making sure members get access to the highest quality care,” said Members Health CEO Matthew Koce.
“They also prove beyond any doubt that allegations of ‘windfall profits’ during the COVID-19 pandemic are blatantly misplaced.”
“Australia’s health insurance industry has gone above and beyond during the pandemic, deferring premiums, providing massive and unprecedented hardship support packages, and innovating faster than ever before with telehealth services and virtual consultations.”
The APRA figures show hospital and general treatment episodes both fell during the June quarter, while participation declined.
Mr Koce said government measures to contain and respond to the spread of COVID-19 have indeed had an impact on the quarterly results.
“But in most States across the country, private hospitals and surgeons are working hard to make up delays to surgery and treatment caused by those restrictions.”
As a group, the 27 insurers in the Members Health Fund Alliance continue to grow policyholders at well over double that of the rest of the industry. They also continue to experience positive growth in the key younger policyholder demographics, in contrast to the declines being experienced by the for-profits.
Mr Koce said declines in private health insurance membership were concerning, not only for the private health system but also for the public system.
“Australia’s health care system relies on a crucial balance between public and private. Because of the COVID-19 restrictions, waiting lists for public elective surgeries are tipped to blow out to more than two years for some surgical specialities.”
“Private hospitals beds are likely to become even more sought after as public hospital waiting lists grow. Even before COVID-19, wait times in public hospitals ran beyond a year for some surgeries.”
Arresting this trend requires some quick policy decisions from the Government, Mr Koce said. Members Health is urging the Government to address entrenched cost drivers in the private system to alleviate affordability issues.
“That includes tackling high medical devices costs while also supporting the private health insurance rebate to make sure it does not fall any lower than 25 per cent due to CPI indexing and is transitioned back to the full 30 per cent.”
“No industry has been spared the impacts of this pandemic,” Mr Koce said. “But the figures prove time and again that private health insurers are doing everything possible to support their members through this difficult period.”