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.