The Private and Public Health Debate Continues

As consumers are finding themselves under more financial pressure to fund their private health insurance they are resorting to unscrupulous measures to protect themselves from gap payments and red tape enforced by their insurers. And even though the market is becoming more competitive one of the country’s insurers seems to be getting consistently poor reviews from clients.

A private survey has found that one in five people making use of the public health system already has private cover. According to IPSOS a further one in ten people who have been to a public hospital have private cover but do not use it. Another 10% of patients in public hospitals used their private insurance to cover their treatments and occupied places that may have been required by needier patients.

One in four people did not declare that they had private health insurance in order to avoid gap payments. According to the government gap payments excluded by health insurance companies or Medicare cost members $629-million in the year to June. 

Gap payments are also being increased because an increasing number of doctors charge higher rates than Medicare’s schedule of fees allows for and it also appears to be influencing the way people use their insurance. On average the out of pocket expense for a hospital stay is $294 but orthopaedics can cost as much as $334 and plastic surgery can go up to $362. Doctors motivate their reasons for charging higher rates by saying that the Medicare rates are not sufficient.

With the impending loss in the 30% rebate many families have had to start looking at ways to compare health insurance policies, in order to make sure they are getting the value they are paying for.

According to the government-led Private Health Insurance Administration Council people between the ages of 30 and 65 are getting significantly less value for their cover than people between the ages of 65 and 69. The 65 to 69 year old age group is traditionally the group with the highest number of claims. $478-million was paid out in hospital rebates for the 30 to 34 year old age group, compared to the $2.1-billion paid to people between the ages of 65 and 69. Forty to 44 year olds only received $432-million.

Some of the problems faced by people with private health insurance include restrictions and exclusions and poor communications and they are complaints that health insurer NIB appears to be getting a lot of. The country’s fifth largest insurance company received twice as many complaints (165) as its next competitor (HBF with 87). NIB currently has 7.5% of the market share, but 40 disputes were filed with the Ombudsman, compared with only 12 for HBF.

Even though the company is the country’s fifth largest insurer it can usually be found fourth on the list of complaints. The majority of its complaints involve exclusions and restriction, verbal information and waiting periods for pre-existing conditions. In response the company said that there was room for improvement in its customer service and would be addressing it through the appointment of a Chief Customer Service Officer. With over 900,000 customers it needs to retain the banks says it is adopting a country-wide customer-oriented campaign.

Because of the company’s focus on providing affordable packages they often are restricted by waiting periods or exclusions. Mark Fitzgibbon said the challenge for the company was communicating that not all packages were fully inclusive and that people were getting what they were paying for. NUB has also come under criticism of late from medical practitioners because of its rules and policies.

According to the Private Health Insurance Ombudsman the three biggest topics of concern for consumers during 2011-2012 were verbal communication (or the lack thereof), exclusions and restrictions and waiting periods