Insurance industry to pay its fair share for health care

NSW Gov

The NSW Government will work with private health insurers to ensure the correct payments are being made to public hospitals under reforms in the upcoming NSW Budget.

The NSW Government will work with private health insurers to ensure the correct payments are being made to public hospitals under reforms in the upcoming NSW Budget.

Under existing arrangements, some private health insurers are only paying half the daily cost of a bed rate for a private patient. The cost of this is borne directly by NSW Health.

This means almost $150 million was denied last year alone in private health insurance funds that should have gone back into the NSW health system to help pay for the services being provided.

With increasing pressure for healthcare services and record investment by the Minns Labor Government in the health system, these arrangements are unsustainable, and a reformed payment arrangement will ensure insurers pay their fair share of costs.

The government is prepared to give the industry 6 months to change its arrangements and contribute its fair share to the public hospital system – and appreciates the constructive engagement with private health insurers so far.

Treasurer Daniel Mookhey said:

“Every dollar that private insurers are not paying is being picked up by taxpayers, and that comes at the expense of other investments NSW should be making.

“There are some private health funds that are paying the right rate, particularly the non-profit private health funds that look after our teachers and our nurses. That is right – it should be a level playing field for all.

“It’s good that underpaying funds are now at the table but we’re clear that we need this problem solved. We’ve got about 6 months to sort it out but otherwise we are going to have to take action to ensure that these funds are paying their bills.”

Minister for Health, Ryan Park said:

“Our public hospitals are busier than ever before, and every dollar counts when it comes to investing in the essential health services that our communities deserve.

“I look forward to working with private health insurers to ensure funds are paying their fair share of public hospital costs.”

/Public Release. View in full here.