Overweight could pay more for health insurance
NIB chief executive Mark Fitzgibbon says discounts could be offered to people with a healthy BMI if the Government adopts a Commission of Audit proposal to allow health funds to charge higher premiums for some customers based on lifestyle choices.PT2M17S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-37r3x 620 349 May 5, 2014
Overweight people could pay more for health insurance if the Abbott government adopts a Commission of Audit proposal to allow health funds to charge some customers higher premiums because of their "lifestyle choices".
Under the current system of "community rating", private health insurers are forbidden from charging older or unhealthier people more for cover.
But in its report, released on Thursday, the Commission of Audit recommended health funds be allowed to vary premiums "for a limited number of lifestyle factors, including smoking, which materially increase a person's health risk".
"It shouldn’t protect people who deliberately engage in behaviours which add to their risk profile": Mark Fitzgibbon. Photo: Angus Mordant
"The community rating of health insurance products means unhealthy lifestyle choices made by some force up premiums for all," the commission's report said.
''Consideration should be given to relaxing rules relating to 'improper discrimination' that prevent health funds from charging different prices based on a person's individual characteristics."
Health Minister Peter Dutton has refused to comment on any of the commission's recommendations.
NIB chief executive Mark Fitzgibbon, who has long advocated such a change, said the company already offered premium discounts to non-smokers in New Zealand, and life insurers in Australia were already able to vary premiums on risk factors such as smoking.
“Community rating is there to protect people who, through no fault of their own, through things they can’t control like their age, that they’re not penalised," he said. "But it shouldn’t protect people who deliberately engage in behaviours which add to their risk profile."
Mr Fitzgibbon said if the government accepted the recommendation, NIB would look to offer discounts to members who “pursue better health behaviour, like not smoking and losing weight".
He said a discount could be offered to people with a body mass index below a certain level, or who took action to reduce their weight.
“Obviously offering a discount based upon weight loss is slightly trickier," he said. "It may well be ... that we offer a discount if somebody actively participates in a weight management program."
Phillip Berner, chief operating officer of non-profit insurer Westfund, said it had long supported the idea of offering lower premiums to people without risk factors such as smoking.
"We should be rewarding people for their healthy behaviours and investing any saved money into preventative programs,” Mr Berner said.
Terry Barnes, a policy consultant who worked for Tony Abbott when he was health minister in the Howard government, said it was "perfectly reasonable" for insurers to vary premiums on the basis of a person's voluntary choices such as smoking, excessive drinking or failing to comply with an agreed disease management program.
"Why should those who do the right thing ... effectively cross-subsidise others' voluntarily made bad choices," he said.
But Mr Barnes said it would be wrong to penalise people for things outside their control.
"You shouldn't penalise people for their natural propensities," he said. "Just because somebody is fat doesn't necessarily mean that they should pay a higher private health insurance premium."
Australian Medical Association president Steve Hambleton said there were better ways to help people improve their health than charging them higher insurance premiums.
"It's the start of something really bad," he said. "It starts to blame individuals for their conditions."
He said excess weight and obesity were influenced by many factors outside a person's control, such as their genes and their access to fresh food.