MTAA Backs New Authority to Control Skyrocketing Health Insurer Fees
The Medical Technology Association of Australia (MTAA) has today backed calls by the Australian Medical Association (AMA) for the establishment of an independent Private Health Insurance Authority.
Data released today by the Australian Prudential Regulation Authority (APRA) has shown insurers are continuing to benefit financially from the ongoing decreases in the benefit levels for medical devices listed on the Prescribed List (formally the Protheses List) to the sum of more than $3.5 billion, adjusted for inflation, since 2017.
MTAA CEO, Ian Burgess, said despite an increase in the utilisation of medical devices, the average PL benefit is continuing to decline, showing the Government’s PL reforms are continuing to deliver savings, noting consumers are getting better value for every device their doctor decides to use in treatment.
“In the last 12 months we have seen the average PL benefit – which is the amount insurers are required to reimburse on behalf of their patient – drop by 4%. This is a continued trend downwards, meaning the corporate health insurance industry is continuing to save big on medical devices in Australia,” Mr Burgess said.
“Unfortunately, the data we’re seeing shows those savings aren’t being passed on by insurers to consumers to help with the cost-of-living. Instead, they’ve been spending those savings on themselves through management expenses like executive bonuses and premium office space.”
APRA data revealed corporate health insurers growth in management expenses has outstripped growth in PL benefits by more than 250%, with insurers now spending a total of $2.6 billion on themselves (up 12.4%) as opposed to spending on struggling consumers. This is on top of insurers doubling their profits to the record sum of $3 billion.
Despite the APRA data, the corporate health insurance lobby have attempted to spin the figures, claiming medical technology makers hadn’t provided significant savings for insurers. This claim is a deliberate falsehood, as public data from APRA shows that based on the lower average difference in PL benefits per item in FY23 and FY22, the savings accrued during the last financial year was just over $89 million, when adjusted for inflation, based on the decreased average in PL benefits per item in FY23 and FY22 - 47% of PL items had cuts in the last financial year.
Mr Burgess said the blatant mistruths and spin being used by the corporate health insurance industry to hide the fact that they have failed to pass on the billions of dollars in savings was exactly why MTAA was supporting the AMA’s call for a new independent Private Health Insurance Authority.
“It’s time for the corporate health insurance industry to be held to account. There is absolutely no excuse for them to be pocketing the savings meant for consumers, particularly during this global cost-of-living crisis. If insurers won’t look out for consumers, it’s time government put in place an authority that will.”