Consultation on regulating product openings for private health insurance

Overview

The Government is implementing a reform that will outlaw private health insurance product phoenixing. This is when an insurer closes an existing product and opens a very similar one at a higher price point, circumventing the Premium Round process. The proposed reform will require private health insurers to apply to the Minister to open a new private health insurance product.

The department is seeking feedback on this reform (which will require legislative amendments) as summarised below:

• Insurers must apply for Minister’s approval of the premium for a new product against a public interest test.
• Insurers would be strongly encouraged to apply for new products through the existing annual Premium Round process for implementation on 1 April of each year.
• Insurers would be encouraged to only submit applications outside of the annual Premium Round process under ‘exceptional circumstances’.
• Insurers would continue to be able to close and terminate products at any time to protect against prudential risk from loss-making products.

Why your views matter

The department is seeking feedback for consideration in the development of the proposed legislative option and its implementation. Your views will ensure that your experience and knowledge are carefully considered during policy implementation.