If you're a private patient, you will no longer get preferential treatment.
If you hold private health insurance (PHI), it's likely that as a private patient in a public hospital, you get earlier and better access to hospital treatment. While this appears to be one of the benefits of PHI, it's responsible for driving your premiums up.
As part of a range of reforms being rolled out now and over the next year, the Australian government plans to make changes to how private patients use public hospitals. If you're a PHI holder, here's how the reform may affect you.
What's changing in public hospitals?
The use of PHI by patients in public hospitals has increased significantly in recent years. According to a report by the Independent Hospital Pricing Authority (IHPA), there has been an increase of over 10% per year in the numbers of private patients treated in public hospitals for the past 7 years.
While this clearly places greater demand on our public hospitals, it was also found that the average waiting time for public patients in public hospitals was double that of private patients in public hospitals. Waiting times for elective surgery for public patients in public hospitals is 42 days, compared with 21 days for privately insured patients.
The Australian government aims to reduce this disparity while still providing private patients with the right to choose where they're treated. Although you should be entitled to better and quicker services as a holder of PHI (and have the right to choose your own doctor, even in a public hospital) you shouldn't receive preferential treatment to public patients in a public hospital. If you're able to jump the queue based on your healthcare provider, not your health condition, it violates the Medicare principles and National Health Reform Agreement.
How will the changes for private patients in public hospitals affect you?
These reforms will create greater fairness among private and public patients in public hospitals. That means no more preferential treatment for private patients.
If you're a PHI holder, you're still perfectly entitled to use a public hospital. It may be that it's the nearest or most convenient for you to get to, or your preferred doctor is there. Regardless, your right to access public hospitals will continue to be respected and upheld, as will the rights of doctors to treat privately insured patients in public hospitals.
Any changes to patients using their PHI in public hospitals will aim to support both the private and public health systems. It's vital that any action taken by one part of the system doesn't negatively change the balance, thereby placing certain patients within our hybrid healthcare system at an unfair disadvantage.
Will it impact your wallet?
In the long run, this will benefit both public and private patients. That's because public patients will have shorter waiting periods, while private patients will see their premiums lower. That's because the practice of public hospitals charging private patients has contributed to a 2.5% increase in insurance premiums over the last few years.
Why are the rules for public hospital changing?
It's changing in order to make Australia's private and public healthcare system work fairly for both private and public healthcare holders. According to the IHPA, in the past there have been a number of practices encouraging patients in public hospitals to elect to use their PHI. This includes job descriptions in advertisements for private patient liaison officers as well as calls to patients on hospital websites about the potential savings the hospital will make if patients choose to be treated as a private patient.
While there's nothing wrong with public hospitals raising additional funding, they cannot prejudice against certain patients. Similarly, there have been cases where patients being admitted to emergency departments have reported being pressured by public hospitals to declare themselves private patients. This can result in you facing large out-of-pocket expenses that may have been free as a public patient. All of this results in higher premiums and increased taxes for PHI holders and Australians more generally, which is why changes are being made.
When will this change come into effect?
The Commonwealth and most states and territories have signed a heads of agreement to underpin public hospital funding arrangements from 2020–21. Because the government must ensure it doesn't unfairly impact either public or private patients, which requires it to deal with the different situations each state faces, the changes will take time to be implemented.
What else is changing during the health insurance reforms?
These reforms are part of a series of changes rolling out now and next year. The government is seeking to improve a whole range of issues in PHI:
- Tiered health insurance. A new four-tier structure, with designations of Gold, Silver, Bronze and Basic, came into effect as of 1 April 2019, with the intention of simplifying some of the complexities involved in PHI.
- Discounts for under-30s. Insurers can now offer discounts for 18- to 29-year-olds of up to 10%.
- Natural therapy cuts. A range of benefits for natural therapies will be stripped away.