Prostheses reform will benefit millions of Australians
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Medibank today welcomed the Commonwealth's 2021-22 Budget, which includes potentially significant reforms to lower the cost of prostheses for Australian private health insurance customers.
The cost of medical devices is one of the largest drivers of premium increases.
"We know there are more savings that can and should be delivered to our customers through prostheses reform," incoming Medibank CEO David Koczkar said.
"Australians with private health insurance have been paying too much for prostheses for far too long.
"The price of medical devices in Australia is around 30% higher than in New Zealand, France and the UK.
"It's encouraging the Government is committed to continuing prostheses reform and to ensuring private health insurance customers are paying a fair price for medical devices.
Reform could give up to $500 million in value back to customers and our commitment is to pass on every dollar saved from prostheses reform to our customers in the form of lower premium increases.
Prostheses reform has been underway since 2017 and has already delivered savings to customers.
Over the period 2017-2021 Medibank expects to pass around $100 million in cumulative savings to our customers from lower prostheses costs. We have already passed on over $80 million to our customers from expected lower prostheses savings since 2017.
The first round of reforms to the prostheses list announced by the Government resulted in our 2017 premium increase being lower than it otherwise would have been because of the reductions. Every year since, Medibank has announced record low premium increases, with the 1 April 2021 premium increase being Medibank's lowest premium rise in 20 years.
The latest measures announced in the Budget are a recognition that more can be done to help take pressure off the cost of private health insurance.
Medibank has consistently committed to passing every dollar in savings from prostheses reform to our customers in the form of lower premium increases.
Medibank customers should expect to benefit from lower private health insurance premium increases if reforms to prostheses are successfully implemented by the Government and are not eroded by surging growth in the number of prostheses used in procedures.