As the coronavirus continues its devastating impact around the globe, challenging almost every facet of our lives, “unprecedented” moves become the order of the day. Yesterday proved to be no exception, with an unprecedented pledge from the head of a private health insurance fund. HBF CEO John Van Der Weilen has vowed that any “undue” profits made from the coronavirus crisis will be handed back to members.
Why such extraordinary profits?
“The takeover of private hospitals by Governments, social distancing and other policies to counter coronavirus mean that far fewer services will be provided to private health insurance policyholders,” said Roy Harvey, report author and health finance expert.
As health insurance funds factor in a fee to members for non-elective surgical procedures and other services – such as dental, physio, chiro (all of which have been affected by social distancing recommendations and government rulings), private health insurance funds are accumulating considerable profits.
”Insurers claimed to be supporting the members through the crisis by delaying premium increases, but they should be passing on these significant savings to households.Rod CampbellReport co-author and Research Director at The Australian Institute
News of this financial ‘return’ to members comes off the back of The Australia Institute estimating health funds will reap a windfall of 3.5 to $5.5 billion over the next six months – due to the Australian government putting a hold on non-urgent elective surgeries.
Says Harvey, “Every policyholder will pay, on average, $500-$750 for services their insurers know they will not be able to use.” He suggests that The Productivity Commission should review this situation immediately, and benefit payments should be monitored monthly with premium levels adjusted accordingly.
It’s not just the average Aussie that could benefit from this monitoring. According to Mr Harvey, “The Commonwealth could also save $1 billion to $1.5 billion by reducing Private Health Insurance Rebate payments”.
“While insurance companies look set to gain billions, they show no sign of voluntarily returning the saving to their policyholders”, said Rod Campbell, report co-author and Research Director at The Australian Institute.
“Insurers claimed to be supporting the members through the crisis by delaying premium increases, but they should be passing on these significant savings to households,” said Mr Campbell.