The value of private healthcare insurance (PHI), particularly for young Australians needing prolonged treatment for mental health care, is highlighted in Private Healthcare Australia’s Annual Hospital High Claims 2019 Report.

Nearly half of all payments for hospital treatment by Australian health funds (47%) were for claims where the benefit payment for the episode of care was more than $10,000.  Health funds paid more than $7.14 billion in benefits for individual hospital claims (for which the benefit payment exceeded $10,000) during 2018, an increase of 4.8% compared to 2017.

PHA’s Annual Hospital High Claims report analyses the nature and magnitude of high claims paid by health funds over the 12 months to December 2018 and is collated using data from 37 health funds representing 100% of the private health insurance industry. In total, health funds paid out on behalf of members 351,279 hospital claims where the benefit payment for the episode of care was more than $10,000, the highest benefit paid being $531,777 for a 11.8 months hospital stay for knee arthrodesis. (Arthrodesis is one of the last options available to obtain a stable, painless knee in a patient with a damaged knee joint that is not amenable to reconstructive measures).

PHA Chief Executive Dr Rachel David said the report highlights the value of private health insurance and demonstrates the contribution private health insurance makes to the lives of individuals, as well as to Australia’s broader healthcare system.

“The report emphasises the importance of health fund membership for young Australians, with more than 18,500 high claims (benefits exceeding $10,000) paid for members under the age of 30 during 2018.This was an increase on the previous year of nearly 1,400 hospital claims (+8.1%).

“Some of these episodes involved hospital stays of more than 100 days for young Australians suffering from mental and behavioural disorders, cancer, stroke and other conditions. Young people often think they’re invincible, but this data shows private health insurance is as important for those aged under 30 as it is for older Australians. It can be very difficult to get long-term treatment for conditions like PTSD, severe depression, schizophrenia, anxiety, alcohol and drug use disorder, eating disorders and chronic back pain in the public hospital system.  Younger people who develop these conditions, or their families, can find themselves out of pocket by thousands of dollars if they don’t have private health insurance.”

Private health insurance is a critical element of Australia’s health care system. PHI pays for close to two thirds of non-emergency surgery in Australia, 67% of same day admissions for mental health treatment and 53% of all mental health care admissions, 57% of joint replacements, 57% of chemotherapy and 75% of retinal procedures.

More than 13.6 million Australians hold PHI and almost half of those have disposable incomes under $50,000 per annum. 80% of people believe that they get value for money from their hospital cover (Ipsos). One of the main reasons for this is control over the timing of medical treatment, having a fully trained specialist responsible for your care, and choice of a nearby hospital.

Funds paid a record $20.8 billion in benefits in 2018, which is expected to increase to over $21.3 billion in 2019. For every dollar paid towards health insurance premiums, funds on average return 86 cents to the consumer in the form of healthcare benefit payments or claims reimbursements. This compares with a 67 cents return for every dollar paid towards premiums for general insurance (car insurance, home building and contents insurance, travel insurance, etc.).