As reported in the Australian on 18 May 2016, Australia’s not for profit health insurance funds are set to launch a national television campaign to tackle the ‘big three’ companies, who they argue are fuelling affordability concern whilst enjoying rising profits. This is aimed at Bupa, Medibank and nib.
Big three making huge profits
The group titled Members’ Own Health Funds (MOHF) chief Troy Sheahan points to recent data from the Australian Prudential Regulation Authority showing that the ‘big three’ recorded a combined gross surplus of over $1 billion in 2015. They control over two thirds of the market.
Big three gouging profits
‘What we’re inevitably seeing on the back of that market dominance is more money being taken out of the sector as returns for shareholders or overseas owners [Bupa] and questions must be asked about the impact that is having on affordability.’
Mr Sheahan highlighted that the recently released State of the Health Funds Report shows that MOHF funds had increased the benefits paid as a percentage of contribution, while the ‘big three’ recorded a decrease.
MOHF plans to inform consumers on the choice they have with a national television campaign scheduled to launch on 22 May.
Complaints about big three
The State of the Health Funds Report also finds that the ‘big three’ were responsible for 66.2% of complaints against their market share of 63.5%. The MOHF funds accounted for only 13.3% of complaints against their market share of 20.2%.
Dentists are well aware that the big funds gouge exorbitant profits from their extras insurance tables for which they pay out about 78% of what they receive. Consumers should consider cancelling their extras/ancillary insurance entirely or, if unwilling to do so, should insure with smaller not for profit funds such as Australian Unity, HIF, Defence Health, Teachers’ Health Fund or Frank.
The time is long overdue when the ADA needs to engage dentists nationwide in a campaign to advise patients to switch to smaller, not for profit insurers.
The big question
Why any knowing Australian would want to insure with Bupa to have their benefits gouged and see Bupa’s profits remitted to their UK parent is a mystery, nor is it logical that they insure with Medibank or nib which have to make profits for shareholders, rather than recycle surplus in benefits to members.