Smokers’ health insurance costs set to rise under Turnbull Government reforms
6th Nov 2015
SMOKERS would be forced to cough up more for health insurance under reforms to be considered by the Turnbull Government.
The Government is launching an online survey that will ask voters if health funds should offer cheaper policies to non-smokers.
The Sunday Herald Sun can reveal health officials are seriously considering the move amid fears many families are downgrading their level of cover.
SHOULD SMOKERS PAY MORE FOR HEALTH COVER? TELL US BELOW.
But smokers who already have health cover are likely be exempt from any changes.
Figures show an extra 100,000 Victorians have opted for no-frills health insurance in the past year.
Often, these policies cover only basic treatment in public hospitals and can include huge gap fees.
At the same time, there has been an almost 10 per cent fall in the number of Victorians taking out all-inclusive policies.
Health Minister Sussan Ley said changes to the scheme were necessary, but it was important the Medicare and public hospital system remained accessible to all Australians.
“Australians of all ages and income types have private health insurance and I certainly support our community rating system, not the US or UK models that exclude sick people and make it only available to the rich,’’ Ms Ley told the Sunday Herald Sun.
“However, there’s still plenty of room to ask the public questions about what they want to see in policies and it’s important we do that to ensure we restore value for money to private health insurance for patients who need it.”
The drop-off in health insurance policyholders taking out full cover comes two years after the former Labor government introduced a means test for the 30 per cent private health insurance rebate.
Many policy holders pre-paid their premiums for two years to avoid losing the rebate. The figures revealed 500,000 policy holders who pre-paid their premiums have now downgraded their cover.
Many are buying “junk” policies with complaints skyrocketing over huge “gap’’ fees and exclusions.
The jump in the number of health fund members downgrading cover represents an extraordinary 50 per cent increase nationally in just 12 months and a 33 per cent jump in Victoria.
The national survey will ask voters how the Turnbull Government could deliver more value to voters.
It will also ask if people with lifestyle factors, including obesity, should pay more or if factors such as age and gender should be considered.
But there are no plans to charge higher premiums for older Australians, the chronically ill or on the basis of gender. The elderly and women of child-bearing age deliver some of the biggest hits to health funds.
Older Australians’ average cost of private hospital treatment — $3360 — is up to 10 times that of younger Australians with the healthy paying premiums to subsidise smokers, the elderly and the sick.
The survey explains that the private health insurance benefits paid for different age groups vary significantly.
It says: “Some people have suggested that community rating should be relaxed to allow insurers to vary premiums to account for age, sickness or lifestyle factors which increase a person’s health risk.
“If insurers were permitted to vary their premiums for different customers, which factors should be considered?’’ the survey asks.
The options include higher prices on the basis of smoking, age, gender, and health or risk factors or no change.
The Commission of Audit established by the Abbott government proposed that private health funds should be able to charge more to insure smokers and overweight people.
Last year, NIB managing director Mark Fitzgibbon endorsed the idea, warning that unless people took greater personal responsibility for their health, there was a “train wreck waiting to happen.’’
Voters will also be asked if the $6 billion Private Health Insurance Rebate should be only for hospital treatment or general treatment or both.
South Morang mum Mira Crivelli says she wouldn’t go without extensive private health cover, despite it taking up a “huge chunk” of her young family’s income.
The mother of two said the investment in her family’s wellbeing was vital.
“When you add it all up it does take up a huge chunk of our expenses, but it’s better to be safe than sorry,” she said.