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27 Jun 2018

An AMA-led outcry over private health insurer Bupa’s decision to fundamentally change its schedules has led to a partial backdown, forced on it by the Private Health Insurance Ombudsman (PHIO).

In March, Bupa – Australia’s largest private health fund – announced changes to its no-gap and known-gap policies. Planned to start in August, no-gap and known-gap rates would only be paid to the practitioner if the facility in which the procedure takes place also has an agreement with Bupa. Medical benefit rates outside those facilities would only be paid at the minimum rate that the insurers are required to pay – that is, 25 per cent of the MBS.

The AMA described it at the time as a big leap towards US-style managed care; demanded a ‘please explain’ from Bupa; called on the Federal Government to launch an investigation into the move. Federal Health Minster Greg Hunt subsequently ordered the PHIO to do exactly that.

The AMA continued to oppose Bupa, leading a strong public and social media campaign against Bupa’s proposed changes. In addition, the AMA has held ongoing discussions with Bupa to represent the concerns of AMA members.

The AMA Federal Council held lengthy discussions about Bupa’s proposed changes and passed two motions formally rebuking Bupa’s plans:

  1. Federal Council expresses its concern at recent changes to health insurance products announced by Bupa.  These changes threaten member choice and access to health care. Federal Council calls on Bupa to reconsider these changes and to act in the interests of its members and the broader Australian community.
  2. That Federal Council recommends that the AMA advises Australian citizens how they can change their private health insurance.

Accordingly, the AMA has welcomed the Ombudsman’s report, released in June, which outlines the detrimental impact of Bupa’s changes on consumers and the lack of appropriate communications provided to policy holders. 

In response to the Ombudsman’s intervention, Bupa promised to restore future access to no-gap schedules for private patients in public hospital emergency departments. Additionally, Bupa has committed to contacting all customers regarding the previously announced changes to the removal of minimum benefits (restricted cover), and what customers can do if they are impacted.

AMA President Dr Tony Bartone said that both the PHIO report and Bupa’s response to it were welcome. He said the move restores some level of transparency.

“The Ombudsman has acted strongly to ensure that there is improved communication and behaviour by health funds,” Dr Bartone said.

“It sends a strong signal to all insurers to be open and honest with their customers. It is vital that credibility is restored to the value of private health insurance. If there is no value, people will not buy the product, and that will put pressure back on the public system.”

Dr Bartone said visiting an emergency department was a stressful event and patients should not have to be worried about whether their public hospital has a contract with a specific insurer when they turn up for care.

He said Bupa made the right call by attempting to restore transparency to their cover.

“We also welcome their re-commitment to maintain both no-gap and known-gap schedules for pre-booked elective surgeries in public hospitals – again without requiring a contract,” he said.

The AMA also noted that Bupa will be required to further communicate to its customers the changes to their policies before bringing in the change.

But the AMA remains critical that Bupa policy holders will not be able to use their no-gap or known-gap cover in non-contracted facilities.

“This remains a major concern for the AMA as it means that patients will still be required to ascertain whether their surgeon and their hospital have a contract with Bupa,” Dr Bartone said.

The AMA has spoken strongly against this and will continue to do so, Dr Bartone said.

“It will continue to represent members views as it applies pressure on Bupa to try and resolve this critical issue.”



Published: 27 Jun 2018