Easing the concern of health insurance

CHANGESare being consideredthat could save up to $800 million a year on health insurance, according to AssistantMinister for Health and federal Member for Lyne Dr David Gillespie.
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Dr Gillespie agreed that the rising costs of health insurance is a source of concern for many Australians.

He added the federal government waslooking atways to cut health insurance costs with ‘areview into prosthesis’.

He explained a committee waslooking into the priceof prosthesis, as there appeared to be a‘arbitrage’ between the market price and the goverment listed price of the artificial body parts.

“If everyone was paying market price rather than what the government saythe price is, health insurers estimate they could save $800 million a year –andthat’s a lot,” Dr Gillespie said.

Dr Gillespie confirmedthe rising cost of health insurance concernsthe goverment and that the‘value judgement issue is critical’.

“Health insurance costs are going up and there is a concern within the industry and within government about increasing costs.The previous health minister [Sussan Ley] had initiated reviews and ways to help. [Minister for Health] Greg Hunt is now looking at these reviews.”

Dr Gillespie said Ms Ley was consideringgold, silver and bronze systems to make it easierfor people to understand and compare what they get.

“There are a lot of junk policies.’’ he said.

“Theseare health insurance policies that exclude most of what peopleneedto have covered andjust payfor easy things, rather than the expensive things.”

Dr Gillespie said the ‘existential problem’ with health insurance is the community rating which is challenged by low numbers.

“Around 35 years ago, everyone had health insurance and it was relatively cheap because everyone had it. Now only 47 per cent of people have health insurance,” he pointed out.

“Imagine how expensive your car insurance would be if only half the cars on the road were insuredand the ones that held insurance were the ones likely to crash. That’s sort of what’s happening- if health insurance doesn’t remainaffordable for the average family and the average worker, less people will hold it, so the premium will have to go up more, which will make it less affordable.”

Within weeks the Federal government will inform health insurers whether their requested premium rate increases fromApril 1 2017 have been approved.

In an interview with Citi analyst Nigel Pittaway, the Herald Sun reports health insurance premiums could grow this year by the smallest amount in a decade, as the government tries to “score a win” for consumers.

The article stated former Minister for HealthSussan Ley last year made insurers resubmit applications to raise rates wherethe increase was on average 5.59 per cent.

“This was below the 6.18 per cent rise in 2015 but well above the current rate of growth in wage,” the report continued.

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