What the COVID-19 pandemic will mean for your private health cover
It's been nearly three months since China reported an unknown virus to the World Health Organisation office on December 31, 2019, with the outbreak declared a Public Health Emergency of International Concern only 30 days later. Many Australians are doing all they can to protect their health, adhering to government-recommended social distancing and hygiene rules, however, there is still confusion as to how COVID-19 will impact people's private healthcare.
The public health system is managing Australia's response to COVID-19, with the private healthcare industry on stand-by to help in whichever way it can. As part of this, all non-urgent elective surgeries in both public and private hospitals have been suspended until further notice, to allow hospital staff to allocate and preserve vital resources to deal with the pandemic.
Many health funds have postponed the upcoming April 1 premium increase for at least six months, in an effort to relieve financial pressure on Australians. Most health funds have also announced additional financial relief for those people who have lost their job, are living on a reduced income or have contracted the virus. This relief includes covering the cost of telehealth psychologist services and reimbursing emergency dental services, as well as a range of other measures.
On top of this, many private hospital policies, across all of the newly-introduced tiers - from Basic through to Gold - will now include full hospital coverage for those affected by the virus. In addition, the government rebate for private health insurance policyholders has been frozen until at least April 1, 2021. The rebate was due to drop by almost 1%, but now consumers will continue to receive the same contribution towards the cost of their private health insurance premiums, thus providing financial relief to nearly 13.6 million private health insurance policyholders across Australia.
As the public health system is managing the COVID-19 crisis, there is still uncertainty as to how the private health industry will support those affected by the pandemic, in particular the process involved once someone has been diagnosed with the virus. However, the Government and the health funds are working through these points and it is clear that private hospitals will offer significant support to the public system during these unprecedented times
The private health industry is a critical aspect of Australia's overall health system, as it helps to relieve pressure on the already-overburdened public health system. Low private health cover participation can have a ripple effect throughout the entire healthcare system. During times of recession - such as the GFC - private healthcare membership can drop off as people tighten their wallets.
However, with recent industry developments such as the rate rise freeze, we may see a change in the way consumers view their cover.
Once Australia has got on top of the COVID-19 crisis, those people who are currently stuck in limbo due to the suspension of non-urgent elective surgeries will get to avoid over-inflated public hospital waiting lists once elective surgeries resume.
Last year, before the COVID-19 crisis, the average wait time for non-emergency admissions in public hospitals was 109 days, compared with just 24 days for private hospitals - meaning patients without private hospital cover waited 4.5 times longer than those privately insured even before the pandemic started.
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