Health funds must fully index benefits
Chair of the AMA Federal Council, Dr Dana Wainwright, said today the AMA is calling on all health funds to index their benefits by a fair and reasonable amount to ensure their members receive value for money for their private health insurance.
Dr Wainwright said that by looking after their members the funds will maintain confidence in the whole private health sector.
On 1 November each year, the Government releases its updated Medical Benefits Schedule, which purports to take into account increased costs in the provision of health services.
At the same time, the AMA also publishes its List of Medical Services and Fees, which provides guidance for doctors in setting fair and reasonable fees.
The AMA List indexes fees by a known formula that takes into account a practice cost component and a net income component. The actual increase varies across the nine major medical peer groups, reflecting the different cost structures.
Shortly after the MBS and AMA Lists are published, most health insurance funds also reassess their benefits by applying various index factors.
Dr Wainwright said that in 2002 only the Australian Health Service Alliance funds and NIB indexed all their medical benefit rebate categories by a factor that was reasonably consistent with the AMA indexation.
"These funds must be congratulated for this prudent and appropriate approach to indexation. They did the right thing by their members and the private health insurance industry.
"Regrettably, most of the other major funds applied substantially lower indexation factors - in some cases, not even 50 per cent of the AMA indexation level.
"Shortchanging fund members will inevitably lead to growing disenchantment with the funds which, in turn, will lead to a decline in membership as consumers question the value of private health insurance.
"It will also force doctors to introduce additional charges simply to bridge the ever-increasing chasm between benefits and cost," Dr Wainwright said.
The AMA will closely monitor the funds' indexation outcomes and advise AMA members to encourage patients to exercise their right to transfer to funds that have applied the AMA indexation factor.
CONTACT: Dr Dana Wainwright, 0418 876 747
Judith Tokley, 0408 824 306