Private health insurance: what’s in it for people with chronic conditions?

The rise in private health insurance premiums from 1 April will put more pressure on people with chronic conditions prompting us to ask—does private health insurance offer value to this cash-strapped segment of the market, or does the cost outweigh the benefit? And do insurers adequately cover the services that someone with a chronic condition — often more than one — really needs?

The financial pressures are already severe for most people with chronic conditions. They are often forced into early retirement (40 percent of forced retirements are due to back problems and arthritis) and subsequently experience a significant reduction in income.

In other cases, they work reduced hours, or may be excluded from the workforce altogether. While some may be eligible for a Disability Support Pension, others are supported by a spouse or partner, or with savings accumulated over their working life. Living in fear of the alternative, many pay a premium price for their illness in more ways than one.

Our hospitals and broader health system are facing a crisis. The recent Australian Medical Association Public Hospital Report Card shows the national median wait time for elective surgery has increased over the past decade, from 27 days in 2001-02 to 35 days in 2014-15. This does not include the wait time between referral and getting an appointment with the specialist.

This situation is a key motivator. People with chronic conditions requiring surgery find reassurance in private health cover to help with the cost of specialised medical procedures with a known provider and hospital stays on-demand. In a recent Painaustralia survey, one consumer said her nerve stimulation device, at a total cost of $150,000, left her out-of-pocket just $15,000 thanks to rebates.

Unfortunately this is where the good news ends. Most respondents to our survey observed that while private health insurance is largely focused on medical or surgical interventions, best-practice treatment of chronic conditions has moved on.

We now understand that the biggest benefit to health and wellbeing, and the greatest improvement in function, is achieved through multi-modal assessment and treatment and sustained by ongoing supported self-management strategies including diet, exercise and stress management. Group and peer support programs are also valued ways to empower consumers to self-manage their chronic conditions.

For chronic pain conditions, which affect one in five and one in three over the age of 65, medication is not effective. While surgery has a role in the more advanced stages of conditions like osteoarthritis, a multidisciplinary approach, using a range of therapies from mainstream as well as complementary medicine, is most helpful to a majority of people.

So there is a real gap between evidence-based best-practice treatment and what consumers can actually access. Despite paying their dues, people with chronic conditions still cannot afford to see an allied health professional on a regular basis because of inadequate rebates.

One consumer told Painaustralia that even on the top level of cover, she is paying $20,000 a year in out-of-pocket costs (excluding surgeries) because rebates for extras and allied health are hopelessly inadequate.

Others say there are very few pain management services offered through their insurer, and Medicare does not fund pain management programs, although they are available for those with work-related inssues through Workcover.

Health practitioners responding to our survey agree. Most report their clients reach their yearly allocation for allied health care within the first four to six months, despite needing treatments long-term.

There is an overall view that rebates for allied health or alternative therapies are provided without matching the needs of the consumer with the skills of the practitioner.

Someone with chronic musculoskeletal pain, for example, will benefit most from a therapist trained in pain management who is able to educate and support the patient with self-management strategies, not simply provide hands-on therapy.

There was concern that people with chronic pain who have private insurance are more likely to see multiple specialist providers and have more unnecessary investigations or invasive procedures than those in the public system.

It was suggested that funds might consider limiting rebates to services provided by practitioners with advanced qualifications or accreditation in pain management.

Painaustralia is a strong advocate for more programs like the Osteoarthritis Management Program at Hunters Hill Private Hospital — which can be accessed by eligible patients with private health insurance at no cost to the patient — and the Healthy Weight for LifeTM knee osteoarthritis program—an innovative program delivered to patients anywhere in Australia with private health insurance.

These evidence-based management programs present a cost-effective way of staving off disability, expensive surgery and associated costs to the hospital system; they might also be adapted to address the massive public health issues posed by conditions such as chronic pain and obesity.

Fear of the unknown compels people with chronic conditions to pay up big for insurance for surgical procedures and hospital stays, even when they can’t really afford it, with many too frightened and uncertain to make any drastic changes, or even properly investigate the alternatives. (The CHF has released a tool to help people choose the right cover for them, it’s worth a look:

There are so many exclusions and poorly considered rebates which overlook the value of prevention and allied health services that the costs often far outweigh the benefits of the tax rebate.

For those in retirement of course, the rebate is meaningless.

Clearly any mass exodus from private health insurance could tip an overworked public health system over the edge. If we really want consumer-centred health care and a healthy society, we need private health insurers to offer policy options with rebates that align with best-practice health prevention and management strategies. Anything less doesn’t make sense, for the individual, the community or for the long-term viability of the private health insurance industry.