Australia:Ombudsman to look into health insurance fund's changes to plans

Federal Health Minister Greg Hunt has ordered the Private Health Insurance Ombudsman to investigate health fund Bupa for its decision to overhaul its medical gap scheme.

Bupa, one of Australia's biggest health insurers, told doctors that insured patients will only be eligible for gap cover if they are treated at a Bupa-contracted hospital or day-stay facility. The decision takes effect in August, reported The Sydney Morning Herald.

Bupa said this only affected doctors in public hospitals and 4% of beds in the private system, but the Australian Medical Association (AMA) has warned the change was a harbinger of US-style managed care.

AMA president Michael Gannon urged Mr Hunt to seek advice from the Department of Health and the Ombudsman about the legality of Bupa's actions, and even look at potential competition and consumer law implications.

Bupa's announcement about the Medical Gap Scheme came soon after news that it would remove restricted cover for pregnancy, hip and knee replacements and other procedures from basic to standard hospital policies from July. It said it made the changes in a bid to lower premium increases and keep the overall cost of health care down.

The health insurer rejected the suggestions that changes to the Medical Gap Scheme was a sign it was moving towards a US-style managed care system, saying doctors will continue to decide what treatment is required and where it will be provided.

"Doctors, never health insurers, will always determine patients’ treatment and care options as they do today; nothing has changed. The doctor’s right to do so is protected by legislation," a Bupa spokesman said.

"However, customers have been asking for greater clarity on costs especially at locations where mixed arrangements were in place, and this change to the medical gap scheme is designed to support this."

HBF, the dominant health insurance fund in Western Australia that is planning to merge with HCF, has also announced it will remove services such as weight-loss surgery, cochlear implants and dialysis from entry and mid-range hospital policies from July, also citing the need to limit future premium increases.

Health insurance funds appear to be taking significant steps to simplify their products ahead of the government’s introduction of gold, silver, bronze and basic categorisation of policies in April 2019.