Private health insurer Bupa has defended “junk” policies as a new name and shame campaign slams major funds for selling useless products to consumers.
Medibank, HCF and NIB are among those singled out by consumer advocacy group Choice on Tuesday as offering policies that are a waste of money – with little benefit above what is provided through Medicare.
Choice spokesman Tom Godfrey says consumers are forking out thousands of dollars for policies that are so useless, they end up using the public system anyway.
Bupa managing director Dwayne Crombie says these cheaper policies with lots of exclusions are designed with “good intent” to attract young people, as the system depends on them to support the costs of older people.
He says he’s got no problem with introducing minimum requirements for policies covering over 45s but insists in a competitive market funds should be allowed to be “ingenious”.
“You should allow people to offer a choice,” Dr Crombie told the National Press Club in Canberra.
He said health insurers could do more when it came to providing information, but “unless we change the way doctors and consumers act here, we’re not going to get a lot of change”.
Mr Godfrey says in many cases, junk policies cover less than one per cent of the services available in hospital, and exclude treatment for the most common serious illnesses like cancer and heart disease.
“It’s particularly concerning that some health funds boast about the popularity of these junk policies, knowing full well they offer inadequate coverage.”
Choice wants the federal government to reconsider whether junk policy-holders should be eligible for the taxpayer-funded private health insurance rebate, or exempted from the Medicare levy surcharge and the lifetime health cover surcharge.
Health Minister Sussan Ley has also expressed concern about junk policies.
Half a million top cover policies were downgraded or dumped last year, prompting her to announce a review of the industry ahead of a reform package.
She says insurers are holding an additional $5.1 billion capital in their pockets.
And yet premium hikes from April 1 will leave the average family forking out hundreds more for private health insurance this year.
Dr Crombie hit back at critics of the price rises, insisting much of it was unavoidable.
But he acknowledged there was waste that could be avoided – like the two-thirds of back surgeries being performed with no benefit to the patient.
Royal Australasian College of Surgeons president David Watters said the health funds could lift their game by making policies more understandable.
He also took a swipe at surgeons who hit patients with hidden fees, insisting patients should know upfront what their costs will be.
“I can assure you that the size of a gap charged by any health professional bears absolutely no reality whatsoever to the quality of service you will get.”
CHOICE’S HIT LIST OF THE WORST OFFENDERS:
* Australian Unity Basic Hospital
* Defence Health Essentials Hospital
* HIF Gold Vital
* Medibank Young Hospital
* NIB Basic Hospital
* HCF Accident Hospital Only Cover
* Medibank Accident Cover