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26 Mar 2018

The AMA has revealed the best and worst of private health insurance coverage, with the release of its AMA Private Health Insurance Report Card 2018.

Following the recent decision by Bupa, which is one of Australia’s largest health insurers, to significantly reduce patient choice and coverage – while at the same receiving the go-ahead to increase its premiums – the Report Card is a timely reminder that private health insurance consumers should shop around.

In releasing the Report Card, AMA President Dr Michael Gannon warned that changes being implemented by Bupa and pursued by some other health insurers will reduce patient choice of doctor and hospital.

And they will leave policy holders questioning the value of their significant investment in private health insurance, he said.

“The big insurers are pursuing a US-style managed care agenda to save costs and further increase profits by making it harder for patients to receive care from the doctor they want in the most appropriate hospital for their condition,” Dr Gannon said.

“Bupa’s new arrangements, which only provide maximum benefits for patients in hospitals with Bupa contracts, undermine the role of the doctor in providing and advising the most appropriate care - and could ultimately drive up out of pocket costs for patients.

“Public confidence in private health insurance is already at an all-time low. These changes will further devalue policies, which are a major financial burden for Australian families, and will place dangerous pressure on the already stressed public hospital system.”

The Report Card provides an overview of how private health insurance should work to benefit patients, and explains how proposed new arrangements will result in less choice and value for policy holders.

It shows that there are a lot of policies on offer that provide significantly varying levels of benefits, cover, and gaps.

“There are also a lot of policies on the market that will not provide the cover that consumers expect when they need it,” Dr Gannon said.

“If people have one of these ‘junk policies’, they should consider carefully what cover they really need.

“The Government has undertaken some important reforms to private health insurance to help people understand the different conditions that each policy category – gold, silver, bronze, and basic – will cover.

“The funds must not be allowed to sabotage these reforms.”

The Report Card shows that some insurers perform well over all, and some only perform well for certain conditions.

It reveals that the same doctor performing the same procedure can be paid significantly different rates by each fund, which is often the untold story behind patient out of pocket costs, despite there being high levels of no gap and known gap billing statistics.

The latest APRA statistics show an overall no gap rate of 88.1 per cent and a known gap rate of 7.3 per cent.

Dr Gannon said the medical profession is working hard to ensure patients receive value for money.

“Our Report Card shows that the profits of the insurers continue to rise, the growth of policies with exclusions continues to grow, and policy holder complaints continue to rise,” he said.

“We explain what insurance may cover, what the Medicare Benefits Schedule (MBS) covers, and what an out-of-pocket fee may be under different scenarios. 

“We also highlight the frustrating fact that what an insurer pays can vary from State to State – even within the same fund.

“To help consumers better understand what they are buying, we set out the percentage of hospital charges covered by State and insurer, and the percentage of services with no gap, State by State.

“There is also a breakdown of the complaints received by provider and organisation, which shows that the number of private insurance complaints are significant, and on the rise.”

The data in the AMA Private Health Insurance Report Card 2018 is publicly available – drawn primarily from the Australian Prudential Regulation Authority (APRA), the Private Health Insurance Ombudsman, and the insurers’ own websites.

The AMA Private Health Insurance Report Card 2018 is at

Further coverage of the AMA Private Health Insurance Report Card 2018 will be a feature of the next edition of Australian Medicine.


Published: 26 Mar 2018