Date published: 
27 February 2018
Media type: 
Transcript
Audience: 
General public

E&OE…

Topics: Turnbull Government’s reforms to keep Private Health Insurance affordable

(Caller excerpt)

ROSS GREENWOOD:
So, the man who has to deal with all of this is the Health Minster, Greg Hunt, who is on the line right now.

Many thanks for your time, Greg.

GREG HUNT:
And good evening Ross.

ROSS GREENWOOD:
You’re a bloke - you’ve probably got pregnancy insurance as well, do you think?

GREG HUNT:
Well, nothing planned at this point in time.

ROSS GREENWOOD:
No, but do you know what I’m saying, though? It seems bizarre that Anne, who is well into her seventies, 74 she told us, has got pregnancy and IVF in her policy and can’t un-bundle it, and you’ve got Marty, who’s a bloke, who’s worked out that he’s had pregnancy and he- not as a father, but as a mother, inside his policy for the past 10 years. He’ll never use it. So, this is where people sit there and look at the private health insurance industry and think that somebody’s having a lend!

GREG HUNT:
Now, this is exactly why what we’ve done is embark on the biggest reform in a decade, which has just produced the lowest premium changes in 17 years. So that’s the first thing.

The second thing is, what people want is knowledge, simplicity, and no surprises. In particular, that means that we’ll introduce four very easy …

ROSS GREENWOOD:
Hang on, hang on Marty got a pretty bloody big surprise when he found out he was covered for pregnancy and he’s a bloke.

GREG HUNT:
That’s why I’m dealing with it. And what they’ve agreed to do, under some very, very tough positioning from the Government, is create four categories: Gold, Silver, Bronze, and Basic. And everybody will get a one-pager which shows what’s in and what’s out - what’s in and what’s out. And that way, there won’t be any surprises and you can make your own choices as to what are the services you do want and the services you don’t want.

It’s never been done before like this and it’s going to be done on our watch as a result of the reforms that we agreed with them, which took a billion dollars out of costs, but most importantly produced the lowest change in 17 years. But I want to go further and keep pushing and, boy, I compare that with the Shorten option, which is a 16 per cent price hike immediately by taking out the lowest-cost option for hundreds and hundreds of thousands of Australians.

ROSS GREENWOOD:
Notwithstanding the fact that it was the lowest increase in 17 years, as you point out, and that on average that is true, but you would also be conscious of the fact that the real life for many people, such as myself. I checked mine out, mine was up by 5 per cent, so that didn’t bear any relationship with the average that was advertised by either my health fund or indeed by your office. So, from that point of view, the real life examples of many people, who have got particularly some of the top covers, is not in proportion with what’s being promoted or advertised out there right now.

GREG HUNT:
Well, these are statements that have been made in relation to the regulator and also they’re subject to ACCC for truthfulness, so it’s absolutely critical that the companies abide by them.

ROSS GREENWOOD:
I understand but statistics it’s all very well. Surely, it would be more important for my health fund to be upfront coming to me and telling me: your increase is, Ross Greenwood, 5.1 per cent, or whatever it might be, as distinct from trying to tell me that the average has gone up by 3.9 per cent, 3.8 per cent.

GREG HUNT:
Well, what we do is we make sure that they publish and are held to account on the national average. In terms of the individuals, part of this is that each individual know exactly what options they have in terms of cost. We’ve actually beefed up the Ombudsman, which is effectively the industry watchdog, the tough, tough, tough cop on the beat.

And by the way, if any of your listeners have issues, I’d urge them to go to our Ombudsman’s website privatehealth.gov.au and there’s the ability to complain or seek information by phone or over the website. And then the critical thing, though, is they’ve got more powers, more funding, more staff. So, on my watch, we’re actually dealing with this.

ROSS GREENWOOD:
And that privatehealth.gov.au, we should explain to people that there you can actually do some comparisons and actually try and check out different funds. Just one issue, though, and that is when we went to the health funds and asked them to explain the price rises, many of them actually pointed out that the Government had frozen the private health rebate, and as a result that, they claimed, added around 0.7 of a per cent to the price increases over the past 12 months. Would you acknowledge that?

GREG HUNT:
Well, that’s something which came on a long while ago. That’s ending on our watch. Interestingly the ALP is proposing to do that out to 2025, which would, it’s all part of what they would do of slashing the rebate. So they do two things, they slash the rebate, and they drive up the cost of premiums on average by about 16 per cent by taking away the lowest cost, basic products. For us, we are going to keep the rebate, we’re going to deal with exactly what you’ve said. We’ve made that commitment. And, in addition to that, we’ve just had, as I say, and as you’ve acknowledged, the lowest change in 17 years.

So every dollar matters and, for me, I’m not resting. We’ve made a good start, but now it’s about the simplicity so everybody can choose exactly what they want and know exactly what they’re getting, the one-pagers, and then of course the services have been increased significantly.

We’re ending the waiting period for mental health upgrades which, for many young people, is incredibly important, and there’ll be major discounts of up to 10 per cent for young people under 30, which they’ll hold until they’re 40 and above.

ROSS GREENWOOD:
Isn’t one of the problems, that I explained to Anne last night, that she gets the bundle that includes maybe getting a hip replacement or a knee replacement, but then that’s bundled together with IVF and pregnancy, even though she’s 74 years old and it doesn’t make sense. But the real reason is that there’s probably somebody out there who is 24 years old, who is more likely to claim on IVF and/or pregnancy cover but is less likely to be making a claim for a hip replacement or a knee replacement, and this is the way insurance works, that there is a pool, if you like, of people.

Some more likely to claim in some areas, some less likely to claim in other areas and it’s the reason why you bring them all together to get a more average, say, claims experience and therefore, I guess, even the premiums that people experience. So if Anne wanted to just be solely insured for hips and knees, she’s probably going to be paying a whole bunch more than what she is if she also includes the pregnancy on her list.

GREG HUNT:
So, essentially what will happen now is you’ll be able to look at the menu of items, and so you’ll see joint replacements, pregnancy, you might see things such as management of ongoing chronic pain, you might see dental surgery, and you’ll be able to say, right, I can see what’s in, I can see what’s out, and then I can shop around and get the right package for me.

So each of your listeners can say, well, now for the first time I’ll actually be able to compare. There’ll be standard definitions, they’ll be consistent across all of the 37 private health insurers, and you’ll be able to see it all in one page, what’s in, what’s out.

ROSS GREENWOOD:
And will I be able to see the impact of those things coming in and out on the premium that I will pay?

GREG HUNT:
So, you’ll be able to work on that with each of the private health insurers, but, I mean, the one-pager will say, if you are buying a Medibank Private Gold policy, you’ll look at that and you’ll say I can see which of the 30-plus items are included, and if I’m looking at an NIB Silver policy, I’ll be able to see what’s excluded, therefore why it’s a lower cost.

If I’m with Teachers’ Union Health, for example, I’ll be able to see what’s in and what’s out and of course, Teachers’ Union Health were horrified. They warned of basically the end of private health if the Shorten plan to slash the rebate and to end the, effectively to end the lower cost policies came into being.

ROSS GREENWOOD:
I’ll tell you what, good to have you on the program. Greg Hunt is the Health Minister responsible for all of that. And do bear in mind, the one thing you do not want if you want to have a viable private health insurance industry in Australia, is you’ve got to make certain that people are not encouraged to leave, because the more people that leave, the more people who are likely to make claims stay in the system, and as a result, the higher the premiums will ultimately go.

Greg Hunt always good to chat to you on the program.

GREG HUNT:
Thanks Ross.

(ENDS)