The Australian Dental Association has joined ranks with Choice, the National Rural Health Alliance and other key groups in calling for a Productivity Commission inquiry into private health insurance.
In a letter issued last week to all members of parliament, they wrote that 70 per cent of consumers believe that the policies they hold are poor value for money.
Previously the ADA has said that health insurance policies which provide extras cover are simply not delivering value for money for consumers, and in some cases, are disadvantaging many policyholders who want to see a practitioner of their choice.
Newly appointed ADA president Dr Carmelo Bonanno stated that insurers need to stop blaming health practitioners for the rising cost of policies and poor rebates.
“Our surveys show that the fees charged by dentists are not the problem. Health insurance premiums have increased at three times the rate of dental fees and nearly 2.5 times wage growth.
“Recent figures from the Australian Prudential Regulatory Authority’s ‘Operations of Private Health Insurers Annual Report 2017-18’ clearly demonstrate the profits that are being made by some health funds,” Dr Bonanno said.
The ADA’s analysis of the report shows that returns for health insurers are high compared to most other companies. The industry-wide data indicates a return on equity of 16.6 per cent—higher than even the major banks who average around 12 per cent.
“These returns are being driven by the big three ‘for-profit’ health funds with the APRA data showing returns of around 30 per cent for Medibank Private and nib and over 60 per cent for BUPA,” Dr Bonanno said.
“Health funds exist to do exactly what their name suggests—fund health. It’s time for them to focus on this instead of their profits.”
Based on a media release sourced from the ADA website.