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AMA at the table on health insurance reforms

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The Federal Government continues with its reforms to health care, shifting focus to the private health sector.

Health Minister Sussan Ley has recently established a Private Health Ministerial Advisory Committee (PHMAC) to develop recommendations across a range of policy areas relevant to private health.

The PHMAC follows on the work earlier in the year of an industry working group on reforms to the Prostheses List. The Prostheses List sets out the reimbursement amounts for thousands of prostheses used in the private health system.

The Minister has announced reductions in the benefit amounts for some prostheses to support a reduction in cost to private health insurers and a consequential reduction in private health insurance premiums for consumers.

The benefits for a small number of prostheses will be reduced from February 2017, including a:

  • 10 per cent reduction across the cardiac devices category;
  • 10 per cent reduction to the ophthalmic (intraocular lenses) category;
  • 7.5 per cent reduction across the hip product category; and
  • 7.5 per cent reduction across the knee product category.

In total, these reductions are expected to deliver savings of $86 million to health funds in the first year, and $394 million over five years. The Minister has also announced moves towards a more transparent pricing model with open disclosure.

The work of the PHMAC is now underway as the second part of the reforms.

The Committee’s terms of reference include a closer examination of private health insurance (PHI) product design with simplified consumer products; standard product categories; the role of exclusions and restrictions; appropriate excess levels; and the scope of services covered by PHI.

The Committee will also look at consumer information; premium setting; second tier default benefits; risk equalization; single billing; lifetime health cover; and providing better value for rural and remote consumers.

The first meeting of the PHMAC considered some early thinking from the private health insurers on product design and a potential ‘Gold/Silver/Bronze’ product classification model.

These are all important areas for review.

The AMA has a strong interest in the work of the Committee and its outcomes.

The AMA has a commitment to a viable private health sector and sees the work of the Committee as key to strengthening the sector and maintaining its relevance and attractiveness to patients into the future.

I am representing the AMA on the PHMAC, using a reference group of senior clinicians to provide advice in the lead in to each meeting.

The AMA will make available on its website the outcomes from each meeting (which are circulated for publication).

I welcome comment and input from members. The work of PHMAC will inform the shape of private health care funding for years to come. It is important that the AMA voice is heard.