Private Health Insurance Reforms 2017: Objectives, Strategy and Future

This report provides a comprehensive analysis of the 2017 private health insurance reforms in Australia. It begins with an executive summary and table of contents, followed by an introduction that sets the context of the reforms within the Australian healthcare system, highlighting the disparity between public and private hospital admissions. The discussion section delves into the target customers (young Australians aged 18-29), stakeholders (customers, government, insurance agencies, and agents), the mechanisms used (legislative, advisory committees, and public consultation), compliance requirements, and accountability measures. The report assesses the effectiveness of the reform, identifying its advantages, such as reducing pressure on public healthcare and encouraging private healthcare use, while also acknowledging limitations, such as the exclusion of elderly citizens and the non-mandatory nature of private insurance. The report concludes with recommendations for further reform and improvements to the healthcare system.

Running Head: PRIVATE HEALTH INSURANCE REFORMS 2017
PRIVATE HEALTH INSURANCE REFORMS 2017
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Executive summary
Healthcare is a very sensitive topic and it requires a great deal of research to extract the data. In
this context, the report discusses the role of the Private health reforms 2017 and intends to find
out the impact of this initiative. Therefore, the purpose of this report is to evaluate and justify the
Private Health Reforms in Australia 2017. In course of the discussion, the report also
encompasses the target customers, stakeholders, compliance and accountability and based on
those information points out the advantages of this new enactment. Furthermore, the report also
evaluates the limitations and recommendations so that the reform will become a rational and
acceptable to all the Australian citizens.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Target customers..........................................................................................................................3
Stakeholders.................................................................................................................................4
Customers................................................................................................................................4
Government.............................................................................................................................5
Insurance agencies...................................................................................................................5
Insurance agents.......................................................................................................................5
Used mechanism..........................................................................................................................5
Compliance requirements............................................................................................................6
Advisory committee.................................................................................................................6
Public opinion..........................................................................................................................6
Associate government healthcare agency................................................................................6
Accountability measures..............................................................................................................7
Effectiveness of the reform..........................................................................................................7
Limitations...................................................................................................................................8
Recommendations........................................................................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................11

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Introduction
Australian health care facility is considered to be one of the best service providers around
the world. There are both private and public hospitals in the country that are liable to provide
best treatment to the patients. As per the government report in 2015-16, it can be argued that
there are around 10.6 million hospitalisations during this tenure among this 25% were linked to
surgical procedure (Hall, 2015). Moreover, there were most of the people approximately 83%
were admitted in the public hospitals whereas only 17% went to the private facilities (Pendziale,
Simic & Stock, 2016). One of the major factors behind this disparity was not associated with the
safety and quality of services that the private hospitals were provided rather the high insurance
rate was alleged to be the crucial factor. As a result of that most of the Australians were reluctant
to get admitted in the private hospitals and health care facilities. In response to this, the
Australian government announced a wide range of reforms regarding the private health
insurance.
Therefore, this report is responsible to deal with the government reforms and its pros and
cons. In addition to this, it can be argued that the report also encompasses the target customers
and possible stakeholders of the reform and the mechanism that is used during the amendment.

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Discussion
Target customers
The primary focus of the reforms is on the young people. Mainly the Australian citizens
with an age from 18 to 29 are considered to be the main target customers of this reform. As far as
the government speech regarding the private health insurance is concerned it can be asserted that
the government fixes its gaze particularly on the young Australians. Therefore, the private health
insurance is limited to the people with the age from 18 to 29. As per the reform it can be stated
that the reform will provide the Australian youths a discount up to 10% for their private hospital
insurances. For an example, a consumer can get $300 savings for a policy worth of $1,500. On
the other hand, a young family with a policy of $3000 can get the premium of $300. However,
the Australian government intends to restrict the age barrier up to 40 years. It means, the
discount will be expired after the consumer turns 40. In other words it can be argued that if a
person will turn 41 and he continues the same policy then it will not be applicable because the
expiration period is set up to the age of 40. Furthermore, it can be argued that within the age
from 18to 29 the Australian youths are eligible to apply for this private health insurance
discounts and they can enjoy this discount up to the age of 40. After that the discount facility will
be expired.
Stakeholders
There is a series of stakeholders associated with the health insurance reforms such as the
customers, the government, the private health insurance agencies and insurance agents. In this
context, the government authority and the target customers are identified as the internal

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stakeholders whereas the insurance private health insurance companies and their agents are
considered to be the internal stakeholders.
Customers
They are identified as the most important stakeholders in this private health insurance
reforms. As the government intends to deliver a better framework for the Australian youths at an
age from 18 to 29 therefore, specifically the young generation are the primary stakeholders. In
this regard, it is important to analyse whether their interests are fulfilled or not (Buchmueller,
Fiebig, Jones & Savage, 2013).
Government
The Turnbull government of Australia is responsible to enact the new amendment for the
benefits of the Australian youths. As a matter of fact, this reform was a government policy with a
government initiative in order to develop better medical health facilities for the youths
(Srinivasan & Arunasalam, 2013).
Insurance agencies
It is obvious that the government reforms hampers the profit percentage for the insurance
agencies as the government decides to make a discount up to 10%. Therefore, it becomes an
important aspect for the insurance agencies to cope with this reduction of profits (Yusuf &
Leeder, 2013). On the other hand, this discount could be an advantage for the insurance agencies
as it can increase the number of customers.
Insurance agents
It can be stated that the insurance agents are entitled to make a deal with the customer. In
this context, due to the health insurance reform they have to follow the new regulations and it

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can affect their business activities as well (Mulcahy et al., 2015). Therefore, the insurance agents
are also considered to be an important stakeholder regarding the reform of the private health care
insurance.
Used mechanism
In this context, the Australian government made a bold move to make their policy a
reality through the legislative mechanism. It has been argued that the legal steps are considered
to be the ultimate mechanism to implement a decision. Moreover, an advisory committee was
also implemented in February 2018 in order to plan the models of care (Health.gov.au, 2018).
Gradually, a Draft of Legislation was also released in March 2018 for public consultation. As far
as the reforms of the private health care insurance of Australia are concerned, the public
consultation was mainly focused on the target group that was the youths of Australia. In the
meantime, the Australian government also employed an advisory committee which was
responsible to calculate the costs and provide suggestions regarding the models of care. Finally
the Private Health Insurance Reforms is proposed to come into effect from April 2019.
Compliance requirements
Advisory committee
According to George et al., (2013) the role of an advisory committee during the
procurement of a draft is to provide adequate information to the government so that the
government will take adequate decisions. In fact, the advisory committee has to extract the data
from various authentic sources and make an in-depth but precise report for the government.

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Public opinion
On the other hand, countries like Australia respect the public opinion in the light of
democratic principles. As a result of that before implementing any act the Australian government
surveys the public opinion so that the act will be enacted for the public benefits. Therefore,
public opinion plays a pivotal role in legal procurement (Cheng, Joyce & Scott, 2013).
Associate government healthcare agency
Besides this, it is also essential for the government to seek help from the related
government agencies. As in his research Einarsdóttir et al., (2013) argued that the government
often communicate with the public through the channels of various government agencies. These
institutions deliver profound knowledge regarding any public issue and guide the government to
take decisions accordingly. In this context, the role of the government health care agencies is to
provide information regarding the condition of the private health care system.
Accountability measures
The government is solely responsible for all the issues regarding the private healthcare
insurance. From the point of view of the government it can be argued that the purpose of the
Australian government is to create a better healthcare facility for the Australian youths.
Therefore, the government sets the target patients with the age limitation from 18 to 29.
However, the government also proposed to restrict the privilege up to the age of 40 years. In fact,
it is mentioned in the legal framework of the private healthcare insurance reform where person
above the age of 40 cannot be entertained to enjoy the discount of 10% (Health.gov.au., 2018).
As a matter of fact, the patients are also considered to be a part of the accountability
measure. From the perspective of the patients it can be stated that they can use the private

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healthcare facilities due to having a discount of 10%. It will provide them good medical facility
with fast medical services in case of crisis. In addition to this, due to the extra burden imposed on
the government healthcare organisations it will be a strategic measure to deviate the youths to get
treatment from the private medical organisations also (Teng et al., 2014).
Effectiveness of the reform
The advantages of the reform are as follows,
 The reform tries to redeem the pressure from the public healthcare organisation by
putting more emphasis on the public healthcare facilities. Therefore, a balance in the
healthcare system will be maintained effectively and as a result of that the efficiency and
quality of healthcare service will be elevated in an intense manner (Cheng, 2014).
 It can be argued that most of the young Australians are suffering with various health
issues and this number is escalating in a rapid pace. Health issues like illegal substance
abuse or the obesity become an epidemic among the Australian youths (Wilkins, 2015).
Therefore, this private health insurance will be a firm step to eradicate the malice.
 Moreover, the private healthcare organisations are also encouraged due to the reform on
private healthcare insurances. It will expect to generate more patients for the private
healthcare facilities. In this regard, the entire healthcare system will get benefits and the
standard of service will also developed effectively.
 In addition to this, the insurance companies are also get profit due to the increase of more
patients. As a result of that the healthcare insurance companies also get profited and
indirectly it will boost the Australian economy.

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Limitations
Despite of having a series of positive sides the private healthcare insurance reforms are
not free from discrepancies. Therefore, the limitations are as follows,
 First of all it can be argued that the reform only incorporate the Australian youths. There
is no provision for the elderly people. The insurance benefit is limited for the age groups
between 18 and 29 and they can enjoy this up to the age of 40. However, the elderly
people must get all these privileges also so that the purpose of the government will be
effective.
 Besides this, the absence of all the citizens is identified as a biased enactment which is
against the democratic principles (accc.gov.au., 2018). It can be argued that the
enactment must have a presence to incorporate all the people in case of healthcare related
decisions rather putting emphasis on specific age groups (Willis, Reynolds & Keleher,
2016).
 On the other hand, it can be asserted that the private healthcare insurance is not
mandatory for the Australian youths. It means they are free to opt for the private
healthcare insurance. Therefore, the importance of the reform is a matter of doubt.
 In addition to this, there are still employment issues for the Australian youths. In fact,
wage issues are also creating severe problems for them. The government attempts in this
regard are not adequate enough. Therefore, it erects the vitality of the new healthcare
reform (Mossialos, Wenzl, Osborn & Sarnak, 2015).

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Recommendations
 Incorporating all the Australian people without any age biasness is the first step that the
government should follow. It can deliver a better justification for the benevolent purpose
propounded by the government.
 The employment ratio has to be taken into consideration. It is important to understand the
number of patients eager to choose the private healthcare services. Without proper
employment it will not be succeeded.
 Putting an extra provision for the aboriginals and minorities will provide the government
more support from the aboriginal communities and at the same time the purpose of the
reform will also be achieved.
 It is important for the government to consider the interests of the private healthcare
agencies more in-depth manner. The new reform framework does not give them any
benefits and it will turn down the private healthcare market in future.
Conclusion
The above discussion tries to identify the pros and cons of the new private medical
healthcare reform for the Australian youths. There are certain positive aspects that the new
reform has identified in terms of helping the youths to get premium private healthcare insurance
with lower costs and for the medical devices industries to sustain in the Australian market.
However, the age specification fails to cover up aged people who equally deserve the facility.
From that point of view, it can be concluded that the private health insurance reforms are not
adequate enough to be implemented.

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Reference
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(2013). Role of public and private funding in the rising caesarean section rate: a cohort
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