WA’s biggest health insurer will lift premiums by an average of 3.62% this year – higher than the industry average of 2.7% which is the lowest rise in 21 years.
HBF will increase its premiums from April 1 – earlier than competitors such as nib (2.66%) and Medibank (3.1%) whose premiums rise on September 1, while HCF is delaying its 2.72% increase until November 1.
Bupa, Australia’s largest health insurer, will lift premiums by 3.18% from April.
Due to the lower-than-normal premium increase, the Federal Government rebate will stay the same in 2022. But despite the lowest increase in two decades, premiums are still growing quicker than wages or inflation, raising concerns that affordability is spiralling out of control.
HBF has the biggest market share in WA, with just over 50% of private health members, followed by Medibank with about 20%.
It defended its increase in a letter to members, arguing it had delivered some of the lowest premium increases of all major health funds over the last 10 years.
Keeping costs in check
HBF executive general manager health services, Dr Daniel Heredia, told Medical Forum that there was pressure on health insurers to keep premium increases to a minimum while staying viable.
“Compared to major health funds, we’ve been consistently the lowest, and even had a rate freeze a few years ago and gave money back to members last year,” he said.
“To date, we haven’t seen claims reduce in terms of the COVID impact, so people are still using their insurance, which is great, but that’s why we have a premium increase, although we’ve worked to keep it as low as possible.
“Sometimes doctors don’t understand that we can’t just increase our payments to every provider, because then our premiums increase and then people drop out of insurance, and everyone’s worse off.”
Dr Heredia said that as a not-for-profit with transparency, if HBF saw claims drop off because of the impact of COVID, money would be returned to members as a refund or reduced premiums in the following year.
Gap scheme being binned
HBF has also recently announced looming changes to its fee arrangements with WA doctors.
Currently, medical providers can choose between two types of arrangements, the most common being full cover or no gap, so patients are fully covered for eligible services and do not pay any out-of-pocket costs.
But under its known gap arrangements, providers can choose how much they charge for each patient on a case-by-case basis. This means patients can face different out-of-pocket costs for the same treatment.
From July 1, HBF will scrap all known gap arrangements with medical providers, with Dr Heredia arguing the historic scheme was problematic and the cause of complaints and confusion for both members and providers.
And as part of the shake-up, HBF had also reviewed all its payments under the full cover scheme, and this will affect what doctors are paid for some item numbers.
ED: Subscribers, keep an eye out for the April edition of Medical Forum magazine for an in-depth interview with Dr Heredia about what the changes to the gap pay arrangements mean for doctors.