Dental News - Australian private health insurance mergers could negatively impact consumer

Dental Tribune International

Tue. 6. March 2018

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CANBERRA, Australia: For Australians, private health insurance is a privilege. Now, further market consolidation in the private health insurance industry, flowing on from the planned A$4 billion merger plan between HBF and HCF, may result in less value for money for current policyholders.

In response to the news of the consolidation between Western Australia’s largest not-for-profit health fund with its east coast counterpart, the Australian Dental Association (ADA) said the merger will not materially benefit the consumer regardless of whether or not market consolidation occurs from for-profit or not-for-profit insurers.

“There is little evidence that consumers are getting adequate value for money when it comes to their private health insurance, yet taxpayers’ funds are underwriting the industry to the sum of A$6 billion per annum in the form of the private health insurance rebate,” said ADA President Dr Hugo Sachs.

According to the health expenditure reports released by the Australian Institute of Health and Welfare, even with the industry subsidy provided by the Australian government, individuals are paying more out of pocket for dental health each year, to the amount of almost 60 per cent annually. Additionally, the overall contribution by private health insurers to dental services has only increased from 14 to 18 per cent.

In addition to paying more, the latest report by the Australian Prudential Regulation Authority (APRA) on private health insurers’ membership and benefits shows that, for the December 2017 quarter, benefits only paid for 46 per cent of the cost of policyholders’ dental treatment. The rest had to be paid out of pocket.

According to the report, dental benefits, which represent around 53 per cent of all rebates paid under general treatment or “extras” policies, have only just returned to 2015 levels. Data from the APRA shows that the average rebate paid per dental service in 2015 was A$65. In 2016, it dropped by 3.1 per cent to A$63—however, according to the latest APRA report, this recently returned to A$65 per dental service.

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