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Government supports decision by health insurers to remove 'lifestyle' benefits.

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Media Release

Senator the Hon Kay Patterson Minister for Health and Ageing

4 September, 2003


The Australian Government has regulated to remove the payment of so-called ‘lifestyle’ benefits by health insurers under their ancillary products, the Federal Minister for Health and Ageing, Senator Kay Patterson, announced today.

In their place, health insurance funds will continue to offer vital ancillary products covering healthcare services such as dental, optical, physiotherapy, community and district nursing, occupational therapy, chiropractic, speech therapy, ambulance, hearing aids and podiatry.

“From 31 December 2003 the payment of private health insurance benefits for goods and services which are primarily for sport or entertainment rather than direct healthcare, will cease,” Senator Patterson said.

Consistent with the Government’s focus on preventive health care, funds can continue to pay these benefits if they are part of a health management program approved by the fund. These benefits will still apply for goods or services that are intended to prevent or improve a health condition.

Fund members will be given at least two months notice of the impending benefit changes.

This regulation has been introduced at the request of the Australian Health Insurance Association and resulted from an agreement with the industry that ancillary benefits should deliver direct health benefits to fund members.

Senator Patterson said ‘lifestyle’ benefits constitute less than 1% of all benefits paid by health funds.

“By comparison, since the 30 per cent rebate was introduced in 1999, the Government has provided almost $2.6 billion for the provision of vital ancillary health services through the rebate,” she said.

“The majority of ancillary benefits paid by funds in the June quarter of 2003 were for dental (50 per cent), optical (15 per cent), physiotherapy (7 per cent) health services. These three services alone account for over 70 per cent of ancillary benefits paid to members.”

The vital ancillary products for healthcare benefits that are to continue “will help people to manage their own health outside of hospitals and, in many cases, prevent hospital admissions and other costs to the medical system,” Senator

Patterson said.

“Unlike Labor, whose position on private health care is driven by an ideological belief that Australians should not have the right to an affordable choice when deciding who provides their health care needs, the Howard Government’s policies are based on the need for sensible and rational policy outcomes.

“The latest figures, from the independent Private Health Insurance Administration Council, show that in the June 2003 quarter, there were more than 530,000 privately insured episodes in Australia.

“These are people who would otherwise join the waiting lists for public hospitals. Privately insured patients are playing an increasing role in funding the Australian health care system and taking the pressure off public hospitals.

“I am committed to ensuring the private health industry is sustainable to ensure Australians can choose between a strong public hospital system and a strong private health insurance system.

“One thing is certain, private health is 30% cheaper under the Coalition Government,” Senator Patterson said.

Media inquiries: Randal Markey or Sarah Higginbottom, Media Advisers, Senator Patterson's office, 02 6277 7220.