A survey of reimbursement practices of private health insurance companies for pharmaceuticals not covered under the Pharmaceutical Benefits Scheme 2008

Abstract

Objective. To describe the current practices and policy of Australian private health insurance (PHI) companies with respect to cover for pharmaceuticals not subsidised under the Pharmaceutical Benefits Scheme (PBS).

Design, setting and participants. A 2008 review of web-published policy statements for top-level hospital and comprehensive general treatment insurance, and survey of reimbursement practices by way of questionnaire, of 31 Australian-registered, open-membership PHI companies.

Main outcome measures(s). Description of the level of pharmaceutical cover and important considerations identified by PHI companies for funding non-PBS pharmaceuticals through benefit entitlements or ex-gratia payments.

Results. Nine of thirty-one PHI companies (29%) provided responses accounting for ~60% market share of PHI. The majority of smaller PHI firms either declined participation or did not respond. The maximum limits offered for non-PBS pharmaceuticals, under comprehensive general treatment insurance, varied significantly and typically did not adequately cover high-cost pharmaceuticals. Some companies occasionally offered ex-gratia payments (or discretionary payments in excess of the policyholder’s entitlement benefits) for high cost-pharmaceuticals. Factors considered important in their decision to approve or reject ex-gratia requests were provided. All results were de-identified.

Conclusions. There is little consistency across PHI companies in the manner in which they handle requests for high-cost pharmaceuticals in excess of the defined benefit limits. Such information and processes are not transparent to consumers.

What is known about the topic? Pharmaceuticals that are not accessible via the Pharmaceutical Benefits Scheme (PBS) may be subsidised through private health insurance. The level of cover through general treatment insurance and hospital insurance varies according to the insurer or policy type and hospital–insurer agreement respectively.

What does this paper add? An increasing proportion of lower cost, high volume pharmaceuticals that are available to consumers without any form of Commonwealth subsidy, under current arrangements, also do not attract any form of PHI cover. There is also little consistency across PHI companies in the manner in which they handle requests for high-cost pharmaceuticals in excess of the defined benefit limits and that such information and processes are not transparent to consumers.

What are the implications for practitioners? PHI could be better engaged to play a more significant role in helping maintain consumer access to essential medicines.