The consumer watchdog has put the hard word on private health insurers to pass on profits to policyholders after paying out $ 500 million less in hospital and extras benefits in 2019-20 due to COVID-19 restrictions.
The lower benefit payout came after the pandemic limited non-urgent elective surgery and non-urgent extras treatments, including most dental, optical and other health services.
At the same time, average premium increases have continued to surge higher than inflation and wage growth, although some insurers such as HBF and Teachers Union Health cancelled this year’s hike.
The latest Australian Competition and Consumer Commission annual report into the industry says health funds reported returning substantial sums to policyholders since the crisis began, including ongoing relief to those suffering financial hardship.
Insurers have also indicated they will use any remaining profits gained from the COVID-19 restrictions to discharge policyholders’ accumulated demand for non-urgent elective surgery, the ACCC says.
“The ACCC expects insurers to act on public commitments to return any profits gained from COVID-19 to policyholders, including through hardship measures such as premium waivers and discounts and through the timely management of any built-up demand for non-urgent elective surgery,” ACCC deputy chair Delia Rickard said.
“In preparing the next report to the Senate, the ACCC will consider the actions taken by insurers in this regard.”
The report also noted Australians had continued to abandon health insurance over the past year, with the proportion of the population holding “hospital only” or combined cover falling from 44.3 per cent to 43.6 per cent over the 12 months from June last year.
“The overall decline in the proportion of people with hospital policies in 2019-20 was possibly due in part to the economic slowdown associated with COVID-19,” Ms Rickard said.
“However, some have asserted that the pandemic also reminded Australians of the quality of Medicare and the Australian hospital system, leading them to question the value of continuing to pay for private health insurance.
“While it is difficult to determine the exact reason why there was a lower proportion of people with hospital cover in the year ending June 2020, there is little uncertainty about the continued downward trend, particularly among younger age groups.”
HCF, Australia’s largest not-for-profit health fund, reported on Wednesday that it had bucked the trend, with its membership base growing by 6 per cent in 2019-20.
The fund claims that is more than 18 times the industry rate and more than every other health fund combined.
Teachers Union Health has also performed better than others, with a 33 per cent rise in millennial and Gen-Z members since August.
Chief executive Rob Seljak partly attributes the increase to the fund putting off premium rises until April and COVID-19 heightening awareness among young people of the value of health.
“The pandemic has demonstrated you can’t take it for granted,” Mr Seljak said.
QUT business professor Gary Mortimer says “doomsday scrolling” – seeing death, illness and tragedy caused by the virus on social media – had made millennials and Gen-Zs more aware of their own health, particularly mental health.