Private Health Insurance Reforms – Objectives, Strategy And Opportunities

Health Insurance in Australia

Health Insurance can be defined as a kind of insurance which provides overall medical as well as financial coverage for the policyholder in case of any medical emergencies. According to the kind of policy owned by the policy owner, the different expenses associated to the treatment of critical diseases, surgery expenses, hospital fees etc. are sponsored by the healthcare insurance company.

In Australia, there are different health insurance companies that have different kinds of health insurances available for students, senior citizens and other category of consumers that offer great benefits for the users. In Australia, almost all the citizens including students, senior citizens are covered for any medical illness under the healthcare division. Users can also eliminate the private healthcare divisions in order to give themselves the provisions of a wider range of healthcare insurance options. The two most important decisions of the healthcare insurances, which are general treatment as well as hospital and the recent reforms that the Australian government has implemented for the benefit of the Australian citizens, will be discussed in details in the following paragraphs.

Recently the Australian government has introduced certain reforms in order to make the health insurances more affordable for the consumers. The analysis of the reform requires it to be explained in a series of steps (Flahiff, 2014).

Different decisions were taken and action were performed by the Australian government to implement the change in the reforms in the healthcare insurance. The dates as well as the action taken on those dates are described in a tabular format given below:

Date Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Actions performed.
October, 2017	Prostheses Rules that were created reduced the revenues by $188 million per annum from the year 2018 and another expected $115 million by 2020 (Preker, Lindner, Chernichovsky & Schellekens, 2013)
January, 2018	Ministerial Advisory Committee was established on costs that were Out-of-the-Pocket.
February, 2018	Most of the benefits, around 80% of the total benefits, that were listed in the Prostheses List in the year 2018 were reduced. There was around 50% degradation in the performance of the superior clinics in hip as well as knee implants. Superior Clinical Performance (SCP) had been greatly reduced. An establishment for a committee to improve mental health treatment in Australia was drafted SAGE Journals: Your gateway to world-class journal research (s & s 2018).
March, 2018	Draft of exposure for the legislative tasks was released for consultation with the public Parliament used legislation in order to support: – Benefits in travel as well as accommodation for rural and regional trips. – Attractive prices for younger people. – Changes in the provision of standard information provision Recovery of costs for tier two eligible users.
April, 2018	Waiting period for the mental health rules came into effect.
End of May, 2018	Exposure for the rules was drafted and its release awaited consultation.
June, 2018	The legislation was passed and rules were made to: – Define and implement the standard clinical definitions of Gold/Silver/Bronze/Basic categories and implement newer information provisions – Removal of benefits for natural treatments and therapies.
July – August, 2018	Private reforms of Health Insurance were integrated with the upcoming 2019 premium round processes SAGE Journals: Your gateway to world-class journal research. (The oral health status, practices and knowledge of pregnant women in south?western Sydney, 2018).
October – December, 2018	Advisory committees advised the Australian government on improving models of caring (which included mental health-care as well as care in rehabilitation centers). Cost models to improve transparency in the out-of-the-pocket costs will also be advised (Wu, Wang, Lam & Hesketh, 2014).
January, 2019	Tier two arrangements will come into immediate effect.
February, 2019	Superior clinical performance (SCP) premiums will be removed form the Prostheses List.
April, 2019	Private Reforms in the Health Insurance sector will come into immediate effect.

There are different aspects of the package that are provided by the Australian government as a part of the package which are further described below in the following pointers:

• Gold/Silver/Bronze/Basic categories of products: These are products and categories of hospitals that offer better experiences and medical services than the exiting old infrastructures.
• Categories of clinics: There are different categories of hospitals/clinics that the patient can be referred to by the insurance company based on the kind of medical insurance he owns.

Benefit reductions from the prosthesis list: Many of the preexisting benefits for the users of the health insurances have been reduced based on the prices of the insurances that is spent by the users (The oral health status, practices and knowledge of pregnant women in south?western Sydney, 2018).

• An agreement between the Medical Technology Association of Australia and the Australian government that asks the medical institutions to abide by the ethical rules and regulations.
• Support for mental health: It has been decided that mental health treatment will also be available under these reforms.
• Discounts available for people between 18 to 29 years of age: Special prices available for people of this category.
• Natural therapies will be covered under reformed and improved health insurance plans for the Australian citizens.
• Administrative reforms has been introduced for tier two health insurances.
• Out-of-pocket costs.
• Support has been extended for the private hospitals.
• Public hospitals will now entertain private patients (Wardle, 2016).
• Some of the earlier schemes as well as products has been terminated from use.

Prices of the health insurance has been revised to make them more affordable to the Australian citizens.

The health ministry, which is under the division 333 in the Private Health Insurance Act of 2007 made the rules for the subordinate legislation. These rules are stated below as:

• Year 2015 Health Insurance Rules in private sector (Complying Product).
• Year 2017 Health Insurance Rules in Private sector (Health Insurance Business) (Hort, Djasri & Utarini, 2013).
• Year 2012 Health Insurance Rule number 2 in private sector (Incentive).
• Year 2017 Health Insurance Rules in Private sector (Lifetime Health Cover).

• Discounts to be provided to 18 – 29 aged customers
• More flexible statement for Private Health Information to be introduced instead of the Standard Information Statement, which are to be provided to the customers.
• Insurance products requirements to be clearly set and stated which covers all the hospital treatment
• Standardized categories of clinical operations as well as Gold/Silver/Bronze/Basic categories of products will come into effect.
• Second-tier eligibility detailed framework to be introduced.
• Natural therapies coverage has to be removed.
• Clarify the protection schemes to be clarified to the customers (Hall, 2015).

Around 25% of users who have insurance coverage for private hospitals insurance purchase restricted coverage plans which are applied to other categories other than psychiatric care in hospitals, rehabilitation as well as care in the palliative unit.Proposals were no longer considered to allow the different insurers in private health sector to offer restricted coverage for other categories of clinical benefits. Categories such as psychiatric care, palliative care as well as rehabilitation were only allowed. Modelling in the Deloitte’s format shows that restrictions removal would help in increasing the rate of draw for medium level products by around 10%, which would in turn be converted to the premium channels (Willis, Reynolds & Keleher, 2016).

Private Health Insurance Reforms in Australia

The Ombudsman of health insurance in the private sector has said that restrictions removal can be harmful since, as it would be removing the access to choose doctors. The prosthesis benefits of the present insurance holders would also be affected under this scheme.

Its importance lies in the fact that, people residing in the rural areas where it is difficult to access the private hospitals will have the flexibility and provisions to now access them more easily and the expenses will be covered under the policy. Retaining restrictions in rehabilitation as well as palliative care in the Silver, Bronze as well as the Basic tiers, can protect the customers from a rapid increase in the premium cases. This in turn will protect the policy holders will be protected from the detrimental changes in the product lines (Osborn, Squires, Doty, Sarnak & Schneider, 2016).

Requirements will be introduced by the Australian government wherein the insurers have to properly inform the adults and the insurance provider about their possible planes termination of any particular product or transfer to a new product. Health insurers Australia already have different kinds of products, which are not available for the new policyholders, and they should be able to decide whether to make them available to the new policyholders to ensure a flexibility in their working. The policyholders should also be able to decide if they want to close an old existing product (Mossialos, Wenzl, Osborn & Sarnak, 2016).

• New policy details
• Difference amount between the terminating and the new policy opted has to be paid.
• Relevant details about waiting periods relevant details that apply for the new product has to be considered by the user.

It is important since a transparency will be maintained at the time of transfer of policy. The users will be informed that not all aspects of the old policy will be covered under the new one. Consumers will be immensely benefitted from this scheme since they will have a clear understanding of the new policy and will have the provision to decide whether to transfer their policies. This will also help the consumers to compare the different health insurance policies and understand in details about the coverage they offer before choosing a particular product (Schoen, Osborn, Squires, & Doty, 2013).

On the 28^th of March 2018, three bills were introduced in form of a package and was presented to the parliament. It implemented certain reforms to make the health insurances simpler as well as affordable for the customers:

• Amendment Bill of legislation in the Health Insurance of private sector in the year 2018.
• A Newer Taxation System, which was the amendment of the Medicare levy surcharge – benefits and passing of the “private health insurance policies excess levels” bill in the year 2018 (Mason, 2013).
• Medicare Levy Amendment for Medicare, which was the “private health insurance policies excess levels”, Bill passed in the year 2018.

The Amendment Bill of Legislation in the Private sector of Health Insurance of 2018 contains some primary amendments. It is expected that the senate will support them in the Parliamentary sitting of 2018 spring. Some of these amendments are:

• Strengthening of the powers held by the Ombudsman of the Health Insurance in the Private sector.
• Better access to travel as well as accommodation benefits for the users.
• improving transparency in providing information to the consumers
• Offering discounts to users of age group of 18-29 (Li & Powdthavee, 2015).

Provisions of the Package by the Australian Government

Low priced products that are low priced play an important role in health insurance of private segment which are rated by the community since it is beneficial for the users who have a fixed income. It is also helpful for people wanting to have access to private medical institutions from rural and interior areas. Users aged between 18-29 have the provision to purchase low priced health insurance coverage plans for lifetime and they do not have to spend too much for that. Younger people also have the option to upgrade their policy in the future as well. A Risk Equalization Pool is used by most of the companies which analyses feedbacks form the communities to improve their products and conduct risk assessment. The Advisory Committee of private health minister had used the delloite model of low priced health insurance products role of low priced products to come up with more strategies of premiums. Affordability by the consumers is most important therefore the prices had been revised and the premiums have been made more cost-effective. People value the coverage of less costly health insurance plans so they should be available to the customers at affordable rates (Jakovljevic, Groot & Souliotis, 2016).

Conclusion:

Therefore, it can be concluded form the above study that health insurance reforms are extremely needed in the society since it has a number of advantages in terms of medical and hospital benefits. However, the policy terms and conditions are often too complex and they are not transparent enough for the users to clearly understand what and all they cover. Therefore, it is extremely important for the Australian government to come up with more flexible and low priced health insurance for the users so that they can immensely benefit and make optimum use of the policies that they purchase.

The health insurance sector in Australia can reach far-reaching heights if they consider the needs of the users and successfully implement the reforms within their work organizations.

References:

Flahiff, J. (2014). Affordable Care Act « Health and Medical News and Resources. Retrieved from https://jflahiff.wordpress.com/tag/affordable-care-act/

SAGE Journals: Your gateway to world-class journal research. (2018). Retrieved from https://journals.sagepub.com/doi/full/10.1177/0898264316686424

s, D., & s, W. (2018). The Australian health care system. Retrieved from https://www.cabdirect.org/cabdirect/abstract/20173279780

The oral health status, practices and knowledge of pregnant women in south?western Sydney. (2018). Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1111/adj.12024

Hall, J. (2015). Australian health care—The challenge of reform in a fragmented system. New England Journal of Medicine, 373(6), 493-497.

Hort, K., Djasri, H., & Utarini, A. (2013). Regulating the quality of health care: Lessons from hospital accreditation in Australia and Indonesia. The Nossal Institute for Global Health, Working Paper Series, 28.

Jakovljevic, M., Groot, W., & Souliotis, K. (2016). Health care financing and affordability in the emerging global markets. Frontiers in public health, 4, 2.

Li, J., & Powdthavee, N. (2015). Does more education lead to better health habits? Evidence from the school reforms in Australia. Social Science & Medicine, 127, 83-91.

Mason, J. (2013). Review of Australian government health workforce programs.

Mossialos, E., Wenzl, M., Osborn, R., & Sarnak, D. (2016). 2015 international profiles of health care systems. Canadian Agency for Drugs and Technologies in Health.

Osborn, R., Squires, D., Doty, M. M., Sarnak, D. O., & Schneider, E. C. (2016). In new survey of eleven countries, US adults still struggle with access to and affordability of health care. Health Affairs, 35(12), 2327-2336.

Preker, A. S., Lindner, M. E., Chernichovsky, D., & Schellekens, O. P. (Eds.). (2013). Scaling up affordable health insurance: staying the course. The World Bank.

Schoen, C., Osborn, R., Squires, D., & Doty, M. M. (2013). Access, affordability, and insurance complexity are often worse in the United States compared to ten other countries. Health Affairs, 32(12), 2205-2215.

Wardle, J. (2016). The Australian government review of natural therapies for private health insurance rebates: what does it say and what does it mean?. Advances in Integrative Medicine, 3(1), 3-10.

Willis, E., Reynolds, L., & Keleher, H. (Eds.). (2016). Understanding the Australian health care system. Elsevier Health Sciences.

Wu, D., Wang, Y., Lam, K. F., & Hesketh, T. (2014). Health system reforms, violence against doctors and job satisfaction in the medical profession: a cross-sectional survey in Zhejiang Province, Eastern China. BMJ open, 4(12), e006431.