A new four-tiered system designed to make private health insurance simpler for some 13 million consumers will leave thousands facing significant premium increases, according to a policy think tank.
Starting in April, many of the 70,000 existing private health-insurance policies will fall into one of four categories – gold, silver, bronze, and basic – and there would also be “plus” versions of those categories.
Despite government claims that the reforms would have overall negligible impact on premiums, Stephen Duckett, a health economist at the Grattan Institute, said the premium hikes would hit some people more than others, as modelling from Deloitte for the Health Department had shown that there would be a significant premium rise for policies falling into the silver category, The Guardian Australia reported.
“What the modelling showed is there are significant premium increases for some packages falling into the silver, but not everyone else, and in fact bronze went down,” Duckett said. “This is a major and complex transition set to occur, and some people will find their policy has been categorised as a lower level of coverage and that as a result, their premiums have reduced but they have lost some of their coverage for certain conditions.”
But Jennifer Doggett, a health-policy analyst with the Centre for Policy Development, questioned the accuracy of Deloitte’s modelling on the economic impact of the changes, saying the process “would have to make a lot of assumptions about consumer behaviour, which is not always rational in this area and which is very hard to predict.”
Doggett also said that rather than simplify insurance, the reforms could make the system more complex.
“It may make the products more uniform, but choosing between those categories can be quite complex and won’t deal with underlying structural problem that health insurance is inherently inefficient and inequitable,” Doggett told The Guardian Australia. “This is just more of the government desperately trying to save a system that’s fundamentally flawed with stop-gap measures.”