Chronic Disease Management: the Role of Private Health Insurance

This research paper, by Amanda Biggs of the Parliamentary Library, provides background information on private health insurance arrangements, as well as the challenges emerging from increasing rates of chronic disease, and discusses the role of Broader Health Cover.

By way of introduction, in 2007, a series of major reforms to private health insurance (PHI) were introduced with the passage of the Private Health Insurance Act 2007(PHIA). One of the key reforms, in fact ‘the most significant new measure’ according to the then Health Minister Tony Abbott, was Broader Health Cover (BHC). BHC allows health insurers to offer benefits to members for programs that either prevent or substitute for hospitalisation, or that help patients with a chronic disease better manage and reduce the effects of that disease.  In effect, these reforms were intended to give health insurers a more significant role in keeping their members healthy.

This paper aims to fill some gaps in knowledge about the implementation of BHC, in order to contribute towards a better understanding of the role such programs can play, and to promote further debate and investigation. Because health insurance is subsidised by the Australian taxpayer via the private health insurance rebate, there is also a public interest in a better understanding of the impact of these programs.