Not-for-profit and member-owned health funds say the Federal Government should reduce excessive medical device costs rather than increase private health insurance costs for low-income older Australians.
The Federal Government should tackle the inflated medical device prices it sets, instead of increasing private health insurance costs for millions of older Australians, according to the Members Health Fund Alliance, the national peak body representing not-for-profit and member-owned health funds.
New Members Health analysis comparing Australian Prostheses List benefits with French prices shows Australians continue to pay thousands of dollars more for essential devices used in hip and spinal surgery, cardiac treatment and hearing implants.
Examples include:
- an Optimal Revision Stem, used in hip surgery, costing $4,968 in Australia, compared with $1,442 in France, a difference of more than $3,500
- a Prodisc-C cervical disc replacement costing $6,021 in Australia, compared with $2,142 in France, a difference of almost $3,900
- a Profemur L Hip Stem costing $3,174 in Australia, compared with $1,217 in France, a difference of almost $2,000, or 161 per cent
- some cardiac pacemakers costing $9,004 in Australia, compared with $6,292 in France, a difference of more than $2,700
- A Cochlear Baha 7 Sound Processor costing $6,808 in Australia compared with $4,828 in France.
Members Health Fund Alliance CEO Matthew Koce said Australians should not be paying substantially more than consumers in comparable countries for the same medical technology.
“Australians are rightly asking why they are paying thousands of dollars more than people overseas for many of the same life-changing medical devices,” Mr Koce said.
“The Government should focus on removing unnecessary costs from the health system before asking older Australians to pay hundreds of dollars more for their private health insurance.”
“These are not luxury products. They are hip components, spinal implants, pacemakers and hearing devices that help Australians maintain their health, mobility and independence.”
The analysis comes as the Federal Government proposes removing the higher Private Health Insurance Rebate currently available to eligible Australians aged 65 and over from 1 April 2027.
Members Health analysis indicates the proposed changes would affect approximately 3.05 million privately insured Australians aged 65 and over, including around 2.13 million people with incomes of $55,000 or less. Around 70 per cent of those affected are in the lowest income tier.
The rebate reduction could increase annual premium costs by more than $400 for many older Australians and is not equitable.
“There is a better option,” Mr Koce said.
“The Government can continue reducing unnecessary healthcare costs through stronger medical device reform rather than increasing costs for low-income seniors.
“Reform has begun, but major price differences remain. Manufacturers deserve a fair return, but Australian consumers deserve a fair deal as well.”
“The Government’s own independent evaluation of the Prescribed List reforms recommended the use of international price benchmarking to inform future benefit-setting decisions. That’s exactly the type of transparency and accountability needed to ensure Australians are getting a fair deal on medical devices,” Mr Koce said.
Members Health is calling on the Federal Government to:
- Retain the long standing and means tested Private Health Insurance Rebate for eligible Australians aged 65 and over.
- Establish ongoing international prostheses benchmarking, to compare Australian prices with overseas markets.
- Increase prostheses price transparency so consumers and policymakers can identify unjustified price differences.
- Prohibit hidden financial incentives between medical device suppliers and third parties.
Members Health warned that making private health insurance less affordable will not reduce older Australians’ need for healthcare.
Australians aged 65 and over accounted for 48.8 per cent of private hospital admissions in 2023-24, meaning changes in insurance participation among this group could affect almost half of private hospital activity.
More than 4,200 Australians have responded to Members Health’s national rebate campaign, with 87 per cent citing affordability concerns and 45 per cent indicating they would cancel, downgrade or seriously consider changing their cover if the rebate changes proceed.
“The Government should focus on reforms that reduce waste and deliver genuine savings rather than making healthcare less affordable for older Australians,” Mr Koce said.
Click here to view a sample comparing prostheses prices charged in Australia v France.
Members Health is the national peak body for an alliance of health funds that are not-for-profit or part of a member-owned group, regional or community based. Together they represent the interests of more than 5.4 million Australians and share a commitment to putting members’ health before profit.