Tornado Alley (PROG)

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F6 .. Report to the Australian Senate on anti-competitive and other practices by health
funds and providers in relation to private health insurance, 1 July 2009 to 30 June 2010

Date published: 7th March 2011

This is the twelfth report prepared by the Australian Competition and Consumer Commission (ACCC) in compliance with an order agreed to by the Australian Senate on 25 March 1999 and amended on 18 September 2002. The order requires the ACCC to provide a report of: … any anti-competitive practices by health insurers or providers, which reduce the extent of health cover for consumers and increase their out-of-pocket medical and other expenses.

An electronic version of this publication is available at no cost.

7th March 2011 .. Health Funds Report.pdf (316.1 KB) .. http://www.accc.gov.au/content/index.phtml/itemId/976521

The pdf is easy to flick through .. i hope you find some of interest .. entree ..

p 5 .. Medical Benefits Schedule Schedule of medical fees set by the Australian Government.

People can claim a rebate of 75 per cent of the schedule fee for in-hospital medical fees and 85 per cent of
the schedule fee for medical fees incurred out of hospital, whether or not they are members of a health insurer.

Medicare levy surcharge

An additional 1 per cent surcharge on the taxable income of high income earners who are eligible
for Medicare but who do not have an appropriate level of hospital insurance with a registered health insurer.

p 8 .. Contracting environment

As in previous reports, contract negotiation and arrangements between health insurers and health service providers remains a chief concern for health service providers. A more transparent and competitive commercial environment has resulted in intense negotiating processes between these two groups. Commercial and economic pressures are affecting the operations of health insurers, including those that are ‘not for profit’.

Insurers appear to have continued to develop a more market-oriented approach to retain membership, market share and, in some cases, profitability.

Some health service providers continue to raise with the ACCC concerns of alleged anti-competitive conduct by health insurers. As stated in previous reports, the ACCC investigated such complaints and to date has found no evidence that the competition provisions of the Trade Practices Act 1974 were breached.

However, parties who consider that a potential breach of the Act has occurred continue to be encouraged to contact the ACCC with evidence of the conduct. Complaints are assessed against the provisions of the Act that prohibit the misuse of market power, agreements between competitors that substantially lessen competition, unconscionable conduct and some forms of exclusive dealing in commercial transactions.

Portability

Compared with earlier years, the portability of health insurer membership continued to be a minor issue in the submissions received in the current reporting period. The ACCC considers this to be partly the result of the introduction of the Private Health Insurance Act 2007, Division 78 of which sets out the portability requirements for complying health insurance policies. Division 78 provides for consumers to transfer between insurers without the imposition of benefit limitation periods.

p 11 .. 2.1. Numbers of Australians with private health insurance

At 30 June 2010, 9 973 864 Australians held private health insurance hospital treatment cover, an increase of 228 622 (2.3 per cent) from 30 June 2009. This represents an increase from 44.4 per cent to 44.6 per cent of the Australian population. Figure 1 illustrates the change in percentage from June 1971.

Figure 1 Australians with private health insurance hospital treatment cover, June 1971 to June 2010 [...]

At 30 June 2010, 51.6 per cent of Australians held private health insurance general treatment cover, an increase of 0.6 per cent from 30 June 2009. The total with private health insurance general treatment coverage at 30 June 2010 was 11 541 701. This is an increase of 342 957 (3.1 per cent) from the previous financial year. Figure 2 illustrates this change in percentage over time.

p 12 .. 2.2. Health insurance market

Private health insurance is provided by health insurers registered under the Private
Health Insurance Act. Health insurers are regulated by the Australian Government.

At 30 June 2010 there were 37 registered health insurers in Australia, all of which were
conducting health insurance business. Ten of these operated on a for-profit basis in the reporting period.

The current regulatory regime for health insurers adopts the principle of community rating. This
means that health insurers cannot discriminate against people because of their age, sex or level of
health risk. Therefore, they must impose the same premium on all members who buy the same insurance product.

A specific exception to the community rating of private health insurance is the Lifetime Health Cover initiative, which began in July 2000. Under this initiative, registered health insurers may charge different premiums based on the age of a member when they fi rst take out hospital cover. People who take out hospital cover early in life will be charged lower premiums throughout their life, relative to people who take out cover later. A person who has paid the higher Lifetime Health Cover premium for 10 continuous years will have their premium reduced to the base rate as long as they retain hospital cover.

A risk equalisation pool also operates in the industry. Health insurers with a
younger and healthier customer base subsidise those with an older or less healthy customer base.

The government also regulates health insurers by imposing conditions on registration. These relate to matters
such as waiting periods, portability between insurers, categories of membership and the types and levels of
benefits. If the conditions are not met, an insurer can be deregistered. .. not sick of it yet? .. great! .. here's more ..
http://www.accc.gov.au/content/item.phtml?itemId=976521&nodeId=1e131b7d92f74ec56591ad026dadd333&fn=Health%20Funds%20Report.pdf

http://www.accc.gov.au/content/index.phtml/itemId/976521

Still keen? FANTASTIC! .. Overview of the Australian healthcare system.