Convincing people to buy health insurance is a daunting task. It is because people are generally unaware about the benefits of insurance. However, there are many who avoid it because of out-of-pocket costs.
Lack of transparency in out of pocket costs is one of the important factors why some people had poor perception of private health insurance and they were not interested in participating in it. It is because even though Medicare does support the cost of service at a private hospital but it does not cover the full cost. In some cases, for example, knee surgery, Medicare only bears 5-10% of the total expenditure as the specialists charge a lot according to their will. Also, the private health insurers are not allowed to cover any kind of out-of-hospital service which puts a lot of burden on the shoulder of the insured.
Reforms by the government
The lack of transparency and awareness about the out of pocket cost were a big issue that needed to be resolved. In the private health insurance reforms, the Government aimed at bringing transparency about out-of-pocket costs in order to lessen the burden on the consumers. During the second wave of these reforms, Medical cost Finder Website was improved to ensure transparency. The website made it easier for people to calculate the expenses they have to bear themselves by evaluating and calculating the exact amount one would have to pay to a specialist. The website is designed to provide both doctors and insured access to important information related to insurance and cost. The budget for ensuring the transparency is expected to be around $ 17.1 million from 2020-21 to 2023-24 by the Australian Government.
Result
The whole idea of ensuring transparency in price sounded noble but it is not clear whether the Government has achieved the desired goals. After the execution of the cost finder tool, some people engaged with it but it did not any major impact on the amount of money spent by them. It is because consumers who were already aware of the impact of out of pocket costs chose cost-effective policies which led to some savings but it did not reduced the overall healthcare expenses. The tool is not used by a large number of people till date but it helped some in finding the best policies for them. By disclosing the price of the policies, the Government helped people in choosing the right insurance plan for them and the increased competition between health insurers also led to decrease in the insurance prices. Overall, the short term goal of reducing out of pocket cost is not fully achieved but it helped many in comparing and choosing the right plan for them.
