June 6, 2018
New research has reinforced the call for life insurers to be allowed to fund rehabilitation costs not covered by private health insurance, claiming more than 10,000 people would benefit each year from life insurer funded services and treatments.
The research, released by the FSC and conducted by Cadence Economics, found that reforms which allowed life insurers to provide targeted rehabilitation payments would provide benefits to a pool of around 10,110 people per year.
Of this group, Cadence found under conservative estimates there were nearly 1400 people for whom early intervention would be beneficial and cost effective rising to 3,600 people under high-side scenarios modelled by the researcher.
Cadence also found the proposed reforms would result in around 90 people each year being prevented from becoming totally and permanently disabled as a result of receiving additional healthcare intervention funded by life insurers.
The FSC stated that a number of research reports had demonstrated that an earlier return to work improved the rate of recovery among insurance claimants and that when a person was off work for 20 days, the likelihood of them returning to work was 70 per cent but this number fell to 35 per cent if they were off work for 70 days.
Based on this research, Cadence also tested how allowing life insurers to fund rehabilitation treatments would affect the time it took to return to work and found that early intervention by life insurers could reduce return to work times from 18 to 13 weeks.
The research also factored in the economic cost of allowing insurers to participate in early intervention and found the Federal Government could save $1.12 billion in healthcare costs over the next two decades.
FSC Chief Executive, Sally Loane said the research showed the involvement of life insurers in early provision of health treatments could potentially increase the quality of life for individuals, provide a better chance to return to wellness, and reduce the likelihood of someone becoming permanently disabled
“By removing the existing barriers, which do not exist in other markets, these early interventions have the potential to allow customers to return to work five weeks earlier and will deliver significant short, medium and long-term benefits to the Australian economy,” Loane said.
“This research clearly demonstrates to policymakers that the changes proposed by the Financial Services Council would deliver better outcomes for all Australians with a simple reform to existing legislation.”