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Australian Health funds stand accused

Private health insurers in Australia have been accused of using private hospital costs as a ruse to put up premiums, while not passing on cost increases to hospitals // .

Private health insurers are believed to have again asked Federal Health Minister Tony Abbott last week to approve an annual premium increase of between 5 per cent and 7 per cent from April. If approved it would be their fifth successive rise at double the inflation rate.

The nation's biggest health insurer, Medibank Private, confirmed yesterday that it had lodged a submission to increase premiums as the Howard Government prepares to consider a shake-up of private health next year.

An independent evaluation of the Government's sale options for the publicly owned Medicare Private has been finalised by investment bank Carnegie, Wylie & Co, and will be considered by ministers next year.

Health Minister Tony Abbott is considering a range of reforms to make private health insurance more attractive, including a frequent flyer-style scheme that rewards members for going to the gym and offers at-home care, including chemotherapy.

Health funds have lobbied with Mr. Abbott to abandon the legislative restrictions on offering services outside the hospital system, including psychiatric care, pregnancy support and step-down care allowing patients to recuperate at home after surgery.

Mr. Abbott yesterday defended the right of health funds to increase their premiums for the fifth consecutive year. Under changes introducing by the Government, funds no longer have to obtain commonwealth permission to increase premiums unless they are seeking a price rise beyond inflation.

An Australian Private Hospital Association spokesman said despite health funds securing substantial premium increases year after year and citing hospital cost as a reason for those increases, 'the reality is they are not passing those increases on to the hospitals'.

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