Health Minister Sussan Ley's flight to the sin bin leaves premium rates covering 13.5 million health fund members and the $20 billion private health fund sector up in the air, as well as a raft of healthcare reforms.
The minister had been due to approve or reject premium increases for 2017 in coming weeks in time for them to begin on April 1. Health funds say they don't want to see a repeat of last year's delays.
Ms Ley told funds to go back to the drawing board after rejecting their initial premium increases, leaving funds little time to communicate the eventual rates to members.
"We'd want to see the premium round approved in a timely and effective way," said Matthew Koce, chief executive of HIRMAA, a lobby for small and regional funds.
"There was a bit of a delay last year and that meant it was hard for funds to communicate with their members in a timely way."
Ms Ley finally signed off on premium increases of 5.59 per cent last March – the lowest for four years – leaving funds pleading for dividends from healthcare reform to help them make ends meet.
With household incomes growth languishing at 1-2 per cent, she has been expected to take a tough line this year too.
Craig Drummond, chief executive of Medibank Private, the largest fund, said late last year healthcare costs were still growing at 5-6 per cent a year and members were voting with their feet by downgrading or quitting their coverage.
NIB Holdings chief Mark Fitzgibbon said in October he expected premiums to rise by less than last year's 5.6 per cent this year because claims growth was moderating from the 6-7 per cent annual rates of recent years.
Health funds are counting on reform processes set in train by Ms Ley to lower the rate of increase in healthcare costs, which has run at 6 per cent-plus for many years.
Mr Koce said funds wanted to see the minister's situation resolved swiftly. He said Ms Ley had initiated good processes to reform health insurance, excessive prostheses (implanted medical devices) costs, Medicare Benefits Schedule items and primary health care (GP services).
Shame
"It'd be a shame to see the momentum lost and it'd be a shame to see [Ms Ley's travel allowance woes] overshadow some of the really good work she has done as a minister."
Rachel David, chief executive of Private Health Australia, the lobby for large health funds, said there should be no loss of momentum because the reforms are mostly in the hands of expert panels charged with working out the details of the broad reforms agreed by Cabinet.
These include simplifying health insurance policies into gold, silver and bronze policies, patient-centred primary healthcare "homes", culling obsolete Medicare Benefits Schedule items and dealing with hospital contracting issues.
"There's a lot up in the air but from my perspective there are procedures in place that will continue whether or not the minister is there. It's not dependent on the minister personally to drive anything through at the moment," Ms David said.
But she said the position needed to be resolved promptly given the expenditure review process for the may budget is already under way and the sensitivity around healthcare funding and health fund premiums.
