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01 Oct 2014 | Press Release

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Australian Government warned: Sell Medibank but don't sell out

Private Health Insurance

The Australian Dental Association (ADA) says that the proposed Medibank Private sale provides a once in a generation opportunity for the Australian Government to better regulate the private health insurance market in the interest of consumers.

President of the ADA, Dr Karin Alexander, said: "The proposed sale of Medibank Private provides the best opportunity for the Australian Government to put in better minimum regulatory safeguards and incentives to ensure that all private health insurers provide genuine value for money for consumers."

Over the years the ADA has raised objections to the activities of private health insurers and called for reform of the industry. Private health insurers, in the pursuit of profit, have engaged in practices that restrict patient choice, place oral healthcare quality at risk and increase out-of-pocket costs.

Over the last five years, average private health insurance premium increases have far exceeded average dental fee increases. Over the same period, the difference between private health insurance premiums received and payouts made to policy holders has been over $5.1 billion.

Private health insurers have minimally increased their rebates for dental services if at all and, through their 'preferred provider' system, unfairly applied different rebate rates to consumers even though they have the same policy with the same insurer. The 'preferred provider' system also interferes with the very important dentist patient relationship and disrupts continuity of care, which is essential to ensure that patients receive the best treatment.

Dr Alexander continued, "We have made repeated submissions to Australian Government regulators such as the Australian Competition and Consumer Commission, the Private Health Insurance Ombudsman and have stepped up our efforts recently by giving testimony at a number of Senate Committee hearings."

Australian taxpayers, through Australian Government policies such as the Medicare levy surcharge, already subsidise private health insurers to the tune of $5.5 billion/year.

"In order for private health insurance to ease the pressure of the public health system, there must be reforms that will ensure that consumers are not paying extra out of their own pocket on top of their insurance – which has been the case for a number of years.

"We urge the Australian Government to ensure that, in selling off Medibank Private, they don't sell out Australian consumers' health and hip pockets."

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