Health Insurance Steps Out Of Hospital

Sydney Morning Herald

Thursday April 27, 2006

Mark Metherell

IN ITS most dramatic expansion of private health care since taking office, the Howard Government will privatise Australia's biggest health fund, Medibank Private, and extend cover for treatment outside hospitals.

The Health Minister, Tony Abbott, denied the changes would pressure health insurance premiums, saying there would be no "carte blanche for profiteering".

Curbs on health insurance will be relaxed, having been blocked before the Government won control of the Senate. Insured patients will be able to claim from health funds for treatments including chemotherapy and diabetes management outside hospitals.

Mr Abbott and the Finance Minister, Nick Minchin, revealed the increase in claimable treatments when they announced the Government would legislate this year to sell Medibank Private.

The fund, which covers nearly one-third of the private insurance market, is expected to sell for between $1 billion and $2 billion. Some proceeds will go to medical research. The expansion of health cover, to take effect next April, will be accompanied by measures aimed at increasing competition, including making it easier to compare health fund policies, and tougher requirements on doctors and hospitals to disclose out-of-pocket charges.

There are also sweeteners planned for those hit by the 2 per cent a year premium loading, which will be removed after 10 years' membership. Single-parent families are also expected to get a reduction in premiums with plans to end the rule which requires them to pay the same premiums as two-parent families. Mr Abbott said health insurance will be able to cover any treatment which prevented the need for later more costly hospital stays. The new arrangements, allowing cover for outpatient and outside hospital services as well as chronic care management for conditions such as diabetes and asthma, reflected the big growth in care outside hospitals in recent years, he said.

Health Department-commissioned research showed broader health cover would not lead to higher premiums "because health funds would have more flexibility in how they covered services", a Government paper says.

The changes could bring "revolutionary" change to the health system by giving funds a greater chance to push for the best clinical options for their members, an industry spokesman said. Dr Michael Armitage, the chief executive of the Australian Health Insurance Association, said the changes should at least help restrain premiums.

The Opposition's health spokeswoman, Julia Gillard, said people were entitled to be suspicious that the insurance changes were "all about maximising the sale price of Medibank Private rather than making private health insurance better value". The Australian Consumers Association welcomed the news. It said the rules encourage unnecessary "high-cost hospital care". Analysis - Page 4Business - Page 26

EXTENDED COVER

* Health funds will be able to cover treatment outside hospital, such as chemotherapy and chronic care.

* Help for consumers to compare funds, including ombudsman's product comparison.

* Tougher requirements for hospitals and doctors to disclose extra charges not covered by insurance.

© 2006 Sydney Morning Herald

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