Health funds facing pressure to return $1.8b savings
Health funds have saved $1.8 billion because of lower demand for healthcare during the COVID-19 pandemic, but only one is returning the savings as a cash handout to members.
None of the nation's four biggest health funds - Medibank, Bupa, HCF and nib - will explain when or how they will return the money.
This is in stark contrast with West Australian health fund HBF, which is preparing to return $40 million of COVID-19 savings back to its 500,000 policy holders - $31 for extras policy holders and $140 per hospitals and extras policy.
Consumer groups and the Australian Medical Association are demanding other health funds do the same.
"If the rest of the industry doesn't act before the premium rise due on April 1, then the Australian government must appoint an independent umpire to make sure that all windfall gains are handed back to people," CHOICE health fund campaigner Dean Price said.
Australian Private Hospitals Association CEO Michael Roff said if the money was not being used to address the backlog of elective surgery, then it should be returned to members.
AMA president Dr Omar Khorshid also called on the insurers to hand back any windfalls.
Industry lobby group Private Healthcare Australia (PHA) last April promised to return windfalls to customers.
By June last year, reserves at Medibank were $297.1 million, HCF $184 million, nib $98.8 million, HBF $94.3 million and Bupa $700 million (worldwide).
Health fund watchdog the Australian Prudential Regulation Authority required the funds to hold the money, and its last report shows the amount held had blown out to a collective $1.8bn by December.
Medibank CEO Craig Drummond said the fund was assessing its COVID reserves every six months.
"Any permanent net claims savings due to COVID will be given back to our customers through additional support in the future," he said.
Bupa managing director Emily Amos said if there was a lower than expected claims rebound, "we will consider ways to ensure that our customers benefit in a way that makes sense".
HCF said if the reserves weren't used on surgery catch-up then the money would be returned to members, while nib was assessing the impact of the pandemic.
PHA CEO Dr Rachel David said assessment of any returns might take as long as two to three years.
Health fund premiums are due to rise again next month, adding $250 a year to the cost of a family hospital and extras policy.
It will be the second rise in just six months.
Originally published as Health funds facing pressure to return $1.8b savings