Private Health Insurance Bill Shock: What Can Insurers Do to Help?

By Anthony Lowe and Jamie Reid


This paper proposes a simple addition to private health insurance (PHI) policies designed to alleviate the severe financial impact of a diagnosis of cancer.

Key points:

  • Cancer can kill you. What is less well known is that the cost of treatment can destroy your financial wellbeing. 
  • Numerous factors drive treatment costs; Medicare pricing, new technology, bureaucratic hurdles, ancillary expenses – travel, medications, prostheses etc. PHI does not cover many of these imposts. 
  • Out-of-pocket expenses can be higher for patients who have PHI than those who don’t.
  • There are regulatory constraints that restrict PHI benefits and a lack of transparency about the extent of likely costs that can create ‘financial shock.’ 
  • Innovative regulatory policy and product design could ease the costs for cancer patients and the health system.

The Dialogue is a series of papers written by actuaries and published by the Actuaries Institute. The papers aim to stimulate discussion on important emerging issues. The opinions expressed in this paper are those of the author and do not necessarily represent those of either the Institute of Actuaries of Australia (the ‘Institute’), its members, directors, officers, employees, agents, or that of the employers of the author