By Doctors’ Health Fund CEO Peter Aroney (Advantage Program)
Q1. Firstly, what has the private health insurance industry done to support customers during COVID-19?
A range of support measures have been introduced by the private health insurance industry in response to COVID-19, which include deferring of rate increases for 6 months, extending cover across products for COVID-19 related hospital admissions, financial relief for members suffering financial hardship and benefits for tele and video allied health services. As well as these measures, Doctors’ Health Fund provided premium reductions for two months, one of only three health funds to do so.
Q2. How has COVID-19 impacted the claiming trends and financials of private health insurance?
The COVID-19 pandemic has resulted in a unique set of circumstances for us all. The elective surgery suspension in particular, is not something many of us would have imagined, let alone planned for.
Health funds will have all seen reductions in claiming in April and May, due to social distancing measures and elective surgery suspensions. In turn, there will be an unplanned surplus in their short-term financials. Although, the extent in which this is a temporary aberration, and whether these claims will simply defer to a later period, are the biggest uncertainties we are still dealing with.
The return to ‘pre-COVID-19’ elective surgery is unknown territory. There have been varied predictions on whether we will see an influx of claims from surgery, once we return to its full recommencement. Questions also remain around the capacity constraints of our private hospitals and clinical practices, waiting times, and the continuing possibility of a ‘second wave’. While the public system would bear the burden of this care, the on-charging of these admissions to private health insurance would be probable.
With the financial year-end approaching, APRA, the prudential regulator of the health insurance industry, has already put the industry on notice that it will be scrutinising the financial statements of health insurers to ensure their reserving adequately caters for the projected bounce-back in claims. Such reserving would offset the surplus profits generated from the lock-downs…
Tagged as: Advantage program, COVID-19, Member services