Welcome to my first blog.
Health funding in Australia – public vs private – is an ongoing topic of debate.
Australia has a health care system that is the envy of much of the world. Public funded (Medicare since ‘84) health has been the cornerstone for many years but Government policies have developed to encourage the uptake of Private Health Insurance (PHI) by as much as 50% of our population.
As far back at the mid 70s I recall being taken by my high school teacher to the emergency department of Belmont Hospital following an injury during a sports afternoon. One of the first questions asked by the receptionist was: “Is your father a contributor?”. My father, working in the steel industry, ‘Comsteel’ at Mayfield West, did in fact ‘contribute’ – and there was no need to ask which fund: we lived in Newcastle, and was consequently assumed a contributor to Newcastle Industrial Benefits (now known as NIB). The receptionist dived into the enormous open tray behind her to pull out our typed (possibly handwritten) index card. I don’t know what the financial/time priority/standard of care consequence was of being, or not being, in a “fund” at the time. In any event I reasonably promptly received the stitches in my hand and my mother arrived to take me home.
But I will today focus on the ancillaries side of health insurance, or “extras” as it is often termed, which covers dental, as well as optical, physiotherapy services to name a few. I have heard some stipulate that rather than health insurance it should be termed “health benefits” (as in NIB; or Medical Benefits Fund, also now better known by its abbreviation: MBF). This is because there are strong differences between the way an insurance policy usually works, and how “extras health insurance” operates in Australia.
Rebates and Gap Payments
An insurance policy will cover you for the cost to repair/replace an insured item such as a car, house or other belonging – less an upfront deductible known as an “excess”. There is a known out-of-pocket which may vary according to certain parameters such as the method of loss – eg earthquake or flood you may have a higher excess, or your teenage son/daughter being the driver instead of an adult. But these are a qualified number of restrictions, readily set out and calculable by the average policy holder. Even “Hospital cover” health insurance usually has an understandable out-of-pocket which is readily set out in the policy.
“Extras” or “Ancillaries” health insurance has more twists and turns than a Hollywood movie. They have defined “benefits” which they will pay for specific procedures. How much you get back from “the Fund” for that specific procedure (if any at all) may vary with any or all the following parameters:
- which level of cover you have (eg kickstarter, basic plus, core extras, core extras plus, core plus, dental plus, top extras, or premium extras – and these are just some of the levels from my old favourite: NIB!);
- how many of those particular items you have had per visit/year/2-3years/lifetime eg limit of 5x one-surface fillings per day, or 2x crowns per year, or 1x (or 2x) denture(s) per 2-3 years;
- what other procedures from the same category you may have had that year eg dentures and root canal therapy or crowns may all fall in the same “complex” category, but not simple fillings. These are usually an annual monetary limit;
how long you have been a member of that fund in that level of cover may afford you an escalating limit for treatment (or not);
- which dentist you see – some funds have “preferred provider” programs, and whether you see a dentist at the health fund’s own dental clinic, a private dentist who has enrolled with the fund as a preferred provider, or just a private dentist who has no affiliation with your fund may result in three levels of rebate or benefit for the exact same service;
- how much the dentist charges for a service – some Funds have a further stipulation that there is a mandatory out-of-pocket for each service: typically paying a set rebate as long as it doesn’t exceed a maximum percentage (50-90%??) of the fee charged. eg if the Fund dictates 80% as their maximum percentage, and the rebate may be set nominally at $60, you will receive that full rebate if the fee charged is, say, $100. If the fee charged was only $60 however, you would receive a refund of only $48. (The reverse is sadly not true – if the fee was $200, or $500, you would still only receive the maximum $60!)
It is this lack of transparency and certainty that causes great friction and angst when it comes to claiming back deserved rebates/benefits after treatment at the dentist.
I do not have a direct relationship with any of the health funds (I am not a “preferred provider” or have any contractual agreement) beyond an arrangement to enable us to electronically submit claims on your behalf and have the payments electronically deducted from your account payable, if your health fund participates in HICAPS.
This system (“HICAPS” Health Industry Claims and Payments Service) saves you having to submit the claims to the health fund and await re-imbursement. This is very convenient for both you, the patient, and especially the Fund who does not have to employ (extra) staff to enter data and process the claims, nor have to bear the brunt of your displeasure immediately after you learn how little you just got back on your claim (or worse yet that you got no rebate because you exceeded your limit or weren’t even covered for that service)!
Statistics show that rebates for individual services, and annual limits, haven’t kept pace with inflation, despite annual premiums for health funds having risen at twice the rate of inflation. (I remember one specific example of a health fund that had an annual limit of $800 per year on all crowns and bridges done. An individual crown attracted a rebate of $410, meaning you could claim nearly two full crowns per year (you missed out on only $20 rebate of that second crown if done in the same year). Now, approximately 20+yrs later, I noted the other day that the annual limit was still $800 per year, despite the rebate per crown now being $750 –effectively limiting the patient to claiming only one crown per year.)
Comparing health funds is difficult to say the least, and most of us even balk at comparing our very basic Compulsory Third Party (CTP) insurance when it is due – and there aren’t that many variables. I did it recently (changed CTP insurance) – it wasn’t rocket science, but I would rather have been doing something else with the 45 minutes extra it took to research premiums (easy) and change insurer (long-winded), to get my car re-registered – but I did save $18.
The Australian Dental Association (ADA) has launched a campaign called Time2Switch, aimed at addressing the apathy and disregard that health funds show toward their membership/population at large.
The campaign is twofold: encourage people (patients/health fund members and health professionals alike) to petition via a letter of complaint to improve private health fund insurance, and to help people assess the suitability of their current dental health cover via a dental health cover comparison tool.
This comparison is not limited to health funds that have an arrangement with a commercial comparison site (such as iSelect.com.au, or comparethemarket.com.au(“compare the Meerkat”), nor is there any direct financial benefit to the ADA as a result of anyone changing or joining a health fund through use of the Time2Switch website.
It may require a small amount of effort initially, but you stand to save quite possibly far more than the $18 I saved on CTP, and to help bring about institutional change through commercial pressure.