Many of Australia’s biggest health insurance companies are failing to provide good value for customers by keeping too much of their premium revenue for themselves instead of paying it out to patients, says Catholic Health Australia.
Analysis of Australian Prudential Regulation Authority data by Catholic Health Australia finds all of the major funds are failing to meet the widely recognised gold standard of returning 90 per cent of premiums to their members.
In 2022, the industry as a whole only returned 83 per cent of its $26.6 billion premium revenue to members, meaning a total of $4 billion went to management expenses and profits instead of patients.
NIB provided the worst value, returning just 75 per cent of premiums to members. BUPA returned only 82 per cent of premiums to members and Medibank was only slightly better on 84 per cent.
The big non-for-profit funds were among those which provided the best value. HCF returned 87 per cent of revenue to its members, while HBF returned 88 per cent.
CHA analysis has revealed insurers increased their management expenses by 18 per cent since 2019 and are sitting on a $2 billion mountain of cash due to reduced claims during COVID-19 lockdowns.
CHA health policy director Caitlin O’Dea said it was pleasing that some insurers were nearing the 90 per cent mark, but she insisted others should be trying harder to give members good value for money.
“The viability of the private hospital system depends on insurers providing good value to their customers,” Ms O’Dea said.
“If insurers don’t provide good value, more people will simply go without insurance, which would heap extra pressure on public hospitals further lengthening hospital waiting times.
FULL STORY
Catholic Health Australia calls for increased payouts from insurers (CHA)
