Life insurers want greater role in rehab
Life insurers should be allowed to cover the cost of rehabilitation services for injured workers, the Financial Services Council (FSC) says.
Under current laws, life insurers cannot provide a benefit under a continuous disability policy for treatment costs where either a corresponding Medicare benefit is payable or where the treatment is a hospital or general treatment.
The restriction applies even when the Medicare or private health cover benefit is exhausted.
“This is a perverse outcome for the individual,” the FSC says in a submission to a parliamentary inquiry.
“If these restrictions were removed… life insurers would be able to help provide the medical help people need to help them get back to work sooner.”
An FSC member survey shows up to 12,000 claimants could be helped if the restrictions are removed, the submission says.
“There is a strong public policy case for making necessary legislative amendments to allow life insurers to offer targeted rehabilitation benefits to continuous disability policyholders.”
The Joint Committee on Corporations and Financial Services inquiry is examining options for greater private life insurance involvement in worker rehabilitation.
AustralianSuper also backs changes to the legislative framework, to let fund trustees provide the full range of rehabilitation services.
“Those changes would result in more… members returning to work earlier than is currently the case, thus improving their future earnings and superannuation contributions,” it says.
“That, in turn, would improve retirement outcomes for members, which is the core purpose of superannuation.”
But Private Healthcare Australia (PHA) fears “adverse impacts” if life insurers can cover medical treatment costs.
Unless safeguards are introduced, life insurers will enjoy an unfair competitive edge through the absence of regulatory constraints imposed on their health cover counterparts, it says.
“PHA is concerned that allowing the provision of health insurance without the existing regulatory protections may be detrimental to consumers.” the peak body says.
It wants to be “satisfied these concerns have been addressed before we could support amending current private health insurance legislation to allow life insurers to cover medical treatment costs”.