Osteoarthritis

How will insurer’s knee/hip replacement exclusions affect osteoarthritis patients?


A major health insurer’s move to exclude hip and knee replacement procedures from its policies will not have a big impact on OA patients, a leading orthopaedic surgeon predicts.

Bupa has come under fire after announcing downgrading of hospital cover for about 700,000 customers from July 1, including the exclusion  of hip and knee replacement from its budget and mid-level policies

Many such procedures were previously offered as restricted services which only covered minimum costs of treatment, but the new move means they are now not covered at all, according to consumer group Choice.

However Dr David Martin, vice president of the Australian Orthopaedic Association, said Bupa was not the first insurer to do this and most budget insurance policies already excluded hip and knee replacements, which typically cost between $15,000 to $20,000.

Dr Martin said he did not expect the move to trigger people to dump cover altogether and put more pressure on the public system, where the median wait time for a knee replacement was 191 days (in 2014-15) compared to around 6-8 weeks for those going private.

“I don’t believe it will have a big impact because I believe it will be a relatively small percentage of people will take up that type of policy, a number of people will upgrade to the higher level of cover and my understanding is that if you are on a basic level you can upgrade without a waiting period,” Dr Martin told the limbic.

“The bigger issue we are concerned about is the previous lack of transparency by health insurers in general, which leaves many members confused about the inclusions in their policies and may result in them believing they are covered for procedures like knee and hip replacements when they simply are not.”

This had become a significant problem in recent years as a raft cheaper private health policies flooded the market, he said.

Upgrading to top cover did not come cheap, according to Choice, which this week advised Bupa customers that an upgrade from budget to top hospital cover would mean a jump of $602 in annual premiums for a single person in NSW and $1219 for a family in Victoria.

A spokesman for Bupa said the move to bring in exclusions – also to apply to gastric banding and dialysis – was designed to improve transparency for customers.

He said the insurer paid out on average $12,000 for hip and knee replacements to those holding its three low-tier hospital policies and $24,000 to those with top cover.

However the company found that many customers holding cheaper policies mistakenly believed they had full coverage, only to find themselves thousands of dollars out of pocket after an operation, the spokesman said.

Meanwhile the AMA has accused Bupa of pushing Australia towards US-style managed care, after the insurer announced that policy holders would only qualify for gap cover if treated at a Bupa-contracted hospital or day-stay facility.

Following the outcry, Health Minister Greg Hunt asked the private health insurance ombudsman to investigate, with question marks hanging over whether the move breached consumer laws.

Bupa has since said it would wind back elements of this plan.

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