Keeping private health insurance affordable
Avant Mutual, Australia’s largest doctor organisation and parent company of Doctors’ Health Fund, has released new economic research highlighting the value of the Government’s private health insurance (PHI) rebate – and what’s at risk if its value continues to erode.
The rebate is one of the most effective investments the Government makes, saving taxpayers more than it costs. However, its real value has not kept pace with medical inflation, falling 19% since 2014, causing private health cover to become less affordable for many Australians.
The report – Protecting Australia’s Dual Healthcare System, shows this decline has already led more than 200,000 people to downgrade from Gold to lower-tier hospital cover. This “tier slide” places pressure on private hospitals, creating a flow on effect to the public hospital system, resulting in longer wait lists.
Private maternity has been particularly impacted, with 18 private maternity units closed since 2018. Access to mental health beds have also been reduced, putting an already strained public hospital system under further stress as queues in public hospitals continue to grow.
Avant’s Chief Medical Officer, Professor Steve Robson, said the rebate is vital to helping Australians continue to access timely and high-quality care.
“As the rebate erodes, more people downgrade or drop their cover, which drives up waiting lists in public hospitals. Without this support, private care would simply be unaffordable for many.”
The report also modelled the impacts of potential changes to the rebate:
- Removing it altogether could see 8 million Australians lose or downgrade their cover, costing governments an extra $3.5 billion annually.
- By contrast, restoring the rebate to its original level could save $4.6 billion over the next decade.
“We want to highlight interdependence of public and private sectors and challenge the overly simplistic arguments about the relationships between private hospitals and insurers,” Professor Robson said.
“We look forward to working with the Government and all stakeholders to ensure that all Australians can continue to have affordable, safe, just access to the healthcare services they need.”
Private health insurance products are issued by The Doctors' Health Fund Pty Limited, ABN 68 001 417 527 (Doctors' Health Fund), a member of the Avant Mutual Group. Cover is subject to the terms and conditions BUSINESS USE (including waiting periods, limitations and exclusions) of the individual policy, available at doctorshealthfund.com.au/our-cover.
