Early Intervention Reforms a Win, Win, Win for Consumers, Government and Insurers
Proposed reforms to allow life insurers to enable costs to be covered for prevention and rehabilitation would provide better social and economic outcomes for individuals, government and life insurers, according to new research by Cadence Economics.
Current rules mean life insurers are prevented from providing payments for treatment for Australians at risk of long-term incapacity where they are not covered by private health insurance or are languishing on public healthcare waiting lists.
Recognising that certain constraints in the current system are leading to negative outcomes for some vulnerable Australians, a Parliamentary Joint Committee is currently considering whether to allow life insurers the ability to provide targeted rehabilitation payments for Australians in need.
Quality of life benefits
According to new research by Cadence Economics for the
In addition, the proposed reforms mean an estimated 87 people per year could be prevented from becoming totally and permanently disabled as a result of receiving additional healthcare intervention paid for by life insurers.
Numerous research reports show returning to work can play a hugely important role in a person's recovery. Analysis undertaken by the Australian Faculty of Occupational and Environmental Medicine in 2011 showed if a person is off work for 20 days, the likelihood of them returning to work is 70 per cent. If they are off work for 70 days, this likelihood falls to 35 per cent.
Therefore Cadence Economics also scenario tested how allowing the restricted treatment would benefit individuals in returning to work.
The report estimates early intervention by life insurers could improve return to work times by an estimated five weeks, from 18 to 13 weeks.
Economic benefits
Aside from the dramatic improvements to the quality of life of some vulnerable Australians, conservative estimates suggest allowing insurers to participate in early intervention could also save the government
The benefit to GDP arising from there being more people in the workforce amounts to
Taking the projected benefits of reform to allow early intervention over this period, Australian real GDP is expected to benefit by
FSC CEO
"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.
"This research clearly demonstrates to policymakers that the changes proposed by the
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