Private health insurance dumped in the thousands after coronavirus restrictions enforce service outages
Hordes of young Australians are giving up their private health insurance plans after the coronavirus pandemic caused health insurers to bill people for services that many could no longer use.
In a first look at the impact of the crisis on private health insurance, the latest data shows that in the three months ended March 31, nearly 11,200 people between the ages of 25 and 29 stopped private health insurance.
While for some Australians, the economic fallout from the pandemic was beginning to take effect.
The trend of young people fleeing the sector is a persistent problem for those in the industry and government who fear the health system could enter a “death spiral”. when young and healthy people continue to give up cover.
The decline in politics coincided with the introduction of the government’s coronavirus restrictions and the subsequent economic fallout from the pandemic.
Consumer group CHOICE said the full impact of the crisis on private health insurance rates would be seen in next quarter’s statistics, with the latest data only taking into account the start of the pandemic.
But even before COVID-19, CHOICE health activist Dean Price said the statistics were grim.
The government saw the coronavirus pandemic Stop all “non-urgent” elective operations to conserve valuable resources such as personal protective equipment (PPE) and help the healthcare system prepare for an expected influx of patients.
Some routine services such as dental and eye care have also been canceled as clinics prioritized urgent cases or closed all of them together.
This meant that the health insurance companies were charging people for services that many no longer used.
The APRA statistics therefore showed a decrease in hospital services compared to the previous quarter by almost 8 percent, while the total services for medical specialties also decreased by about 8 percent.
Health insurance companies are preparing for the “backlog” of claims
Rachel David, chief executive officer of Private Health Care Australia, said if the drop in benefits paid means the health funds are sitting on additional profits, they would try to pass that on to members.
“The Health Funds are committed to reimbursing members for any additional funding resulting from COVID-19-related restrictions resulting in the cancellation of some elective surgeries and some related health services,” said Dr. David.
she said now the government had given the go-ahead for the resumption of elective operations, the industry was prepared for an increase in demands.
“Health funds must remain well capitalized and prudentially sound throughout and beyond the COVID-19 crisis to fund the backlog on elective surgery and related health services,” said Dr. David.
Health Funds have acted to cushion the financial blow from COVID-19, Delaying a planned premium increase and shortening or canceling waiting times for people to make claims.
Dr. David said all Australians who were still in financial need due to COVID-19 were encouraged to contact their health insurance company directly to discuss other options.
But CHOICE rekindled calls for a system review, accusing the industry of dragging its profits by passing profits on to consumers.
“Policies that were of little value prior to COVID-19 have only gotten worse as the industry hesitates to return its unexpected profits to its customers,” Price said.
“The Australian government needs to conduct a thorough public investigation into the entire system.”