Health fund leak reveals how Aussies are dudded
EXCLUSIVE: Health fund reforms that take effect next April were designed to protect health fund profits and they will reduce the amount funds pay out to their members, modelling shows.
News Corp can reveal an assessment of the reforms by consultants Deloitte commissioned by the Federal Government included the basic assumption that health fund profits would be maintained at their current level.
The analysis also showed the percentage of benefits health funds pay to members for joint replacements, cataract surgery, insulin pumps, pain therapy and weight loss surgery will decline under the reforms.
Health funds have rejected the modelling and claim it "was only ever an input into work-in-progress and is not reflected in the final reforms, the intent of which is to assist consumers in choosing appropriate health insurance".
A spokesman for Health Minister Greg Hunt confirmed the modelling existed and said the changes would actually drive down premiums by 0.3 per cent.
Doctors are calling for a people's revolt against the reforms claiming they discriminate against women, strip people of cover and will force people back to the public hospital system.
President of the Australian Society of Ophthalmologists Dr Peter Sumich says under the reforms it will be "cheaper to pay for your private cataract surgery from your own pocket and save the money you would spend on a poor insurance product".
Prominent obstetrician Dr Gino Pecoraro says it is an "insult" and that women will have to buy the most expensive level of cover - Gold - to be covered for pregnancy.
"Only people power will change this. When we have a federal election voters have to go and speak to their local member and say what are you going to do to fix this?" Dr Pecoraro said.
Spine surgeons, ophthalmologists and pain experts are also furious about the changes they claim will strip more than half of all health fund members of coverage for some of the most commonly performed procedures.
Under the changes health fund policies will be standardised into four categories Gold, Silver, Bronze and Basic and health funds can close existing products and shift people into new ones.
In anticipation of the reforms the nation's largest insurer BUPA axed cover for hip replacements, cataract surgery, pregnancy from 700,000 budget health cover policies as did HBF.
Pregnancy, hip and knee replacements, cataract surgery, spinal fusion dialysis, IVF, weight loss surgery, sleep studies and treatment for chronic pain health funds will only have to be covered in Gold policies under the reforms.
Currently only 46 per cent of people with private health insurance have top cover, the equivalent to the new Gold category.
Minister Hunt said people who could only afford Silver or Bronze cover would be able to buy add on products such as silver plus pregnancy but it is unclear whether this will end up being cheaper than top cover.
"It is important to note that our new gold, silver, bronze and basic tiers and clinical categories do not change the existing cover for consumers.," a spokesman for Mr Hunt said.
"If a product currently covers particular clinical categories, then that product will be able to continue to offer that cover."
Private Healthcare Australia chief Rachel David said if someone's current product currently covers all clinical categories except obstetrics, then that product will be able to continue to offer that cover in the 'Silver Plus' category.
"If, for some reason, an insurer did decide to change the scope of a product's coverage, all consumers are protected by portability provisions. This would mean that if a consumer chose to transfer their cover to a new product or insurer, then their previously served waiting periods would be honoured," she said.
Former AMA president, former Liberal Party candidate and ophthalmologist Dr Bill Glasson says the government must reconsider the decision to remove cataract surgery from all products except Gold cover.
According to a Deloitte analysis six per cent of basic policies and 57 per cent of medium health insurance policies cover cataract surgery.
Neurosurgeon Associate professor Ralph Jasper Mobbs said under the reforms complex spine surgery such as severe degenerative disorders, cancer and trauma cases requiring reconstructive operations and spinal implants would only be covered in Gold policies.
"If you've had health insurance for many years and you think you are covered, then wake up and can't move your arm or leg because of a cancer or bulging disc and you are in a silver policy, you won't be able to have your procedure in the private system, and then have to rely on the already over burdened public system," he said.
Chronic pain treatments will only have to be included in the most expensive Gold level cover.
"We don't want a situation where many are forced to drop their PHI cover altogether, further exacerbating access issues across the public health system," says pain Australia CEO Carol Bennett.
Australian Medical Association president Dr Tony Bartone said: "if people are going to get poorer coverage or less value because of these reforms, that is a major concern.
"The Government will need to re-examine how these matters can be addressed once the Gold, Silver, and Bronze categories are rolled out, to protect the interests of consumers."