Health insurer profiting from COVID-19, says APHA
Health insurer nib is anticipating record profits this financial year, but according to the Australian Private Hospitals Association (APHA), instead of repaying members’ fees as others have done, it is pocketing the extra cash.
APHA CEO Michael Roff said nib has reported it expects its underlying operating profit for the financial year 2020–2021 to be in the range of $200 to $225 million, citing lower than expected catch-up from last year’s COVID-19 elective surgery shutdowns.
“This would represent a 50% increase in profit on the previous year, driven by the fact nib members paid premiums for services they couldn’t access.
“Funds have been saying they need to hold on to these payments because of the ‘inevitable’ catch-up in elective surgeries. But, this is not happening at anywhere near the rate they are suggesting. Instead, they should return the fees paid to their members and stop hoarding cash on a pretence.”
Roff said other funds have led the way. HBF in Western Australia has recognised returning unused funds to members was ‘the right thing to do’ and put $40 million back into policyholders’ pockets, while AIA is providing members with an average rebate of around $200 each.
“Medibank reported in March they are holding deferred claims of $310 million, so there are more funds making money out of COVID-19 than not,” Roff said. “We also know that activity levels in private hospitals were down 6.9% in 2020 compared to 2019, so the rush to elective surgery has not occurred. There is no reason why all health funds can’t declare how much they will return to members.
“Australians have been hit hard by the pandemic and, if private health insurers are holding on to money that could help people struggling to pay the bills, they should also ‘do the right thing’,” he said.
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