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Rising health insurance premiums “threatening the viability of the entire health system”

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AMA delivers its Private Health Insurance Report Card 2018.

If continuing health insurance premiums increases are not addressed, Australians will continue to ditch their cover and threaten the viability of the entire health system, the Australian Medical Association (AMA) has warned with the release of the Private Health Insurance Report Card 2018.

AMA president, Dr Michael Gannon, said that while affordability is important, the value of health insurance is critical to consumers who are confused by complex products "many with low benefits, differing definitions, exclusions, and restrictions".

“There are also a lot of policies on the market that will not provide the cover that consumers expect when they need it,” Dr Gannon said in a statement.

Gannon is hopeful that the reforms to the private health insurance industry will help to clear up some of the confusion.

“The Government has undertaken some important reforms to private health insurance to help people understand the different conditions that each policy category – gold, silver, bronze, and basic – will cover," said Dr Gannon.

The report took specific aim at health insurance giant Bupa in regards to its recently announced changes to its minimum benefits, which AMA warns will potentially drive up out-of-pocket costs for consumers.

“Bupa’s new arrangements, which only provide maximum benefits for patients in hospitals with Bupa contracts, undermine the role of the doctor in providing and advising the most appropriate care – and could ultimately drive up out-of-pocket costs for patients," Dr Gannon said.

Bupa contends that the changes to its Medical Gaps Scheme are designed to improve affordability and transparency. In response to continued stories surrounding out-of-pocket costs, managing director of Bupa Health Insurance, Dr Dwayne Crombie, said Bupa members want transparency around gaps fees.

"We all know the pressures of affordability of health insurance and health care. As a health insurer we have a role to play in that, which includes working with doctors and hospitals to make members aware of their costs, the choices customers are free to make and ensuring that the care they receive is most appropriate for them," Dr Crombie said.

Private Healthcare Australia’s CEO Dr Rachel David also weighed in on out-of-pocket costs.

“Health funds do their best to cover the gap for most surgical procedures, but they are unable to chase fees which continue to escalate above inflation, without causing premiums to go up for everyone. Transparency around fees and charges is critical for the sustainability of the private health system, which provides over two thirds of elective surgery in Australia,” said Dr David.

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