Private health insurers have returned almost $4.8 billion to Australian customers after pledging not to profit from reduced access to health services during the pandemic.

Millions of physiotherapy, dental and other medical appointments were cancelled during pandemic lockdowns, while elective surgery was interrupted for months at a time.

The widespread disruptions resulted in large savings for private health insurance companies, which did not have to pay for the cancelled appointments.

Figures released by the Australian Competition and Consumer Commission show the industry has handed back $4.771 billion to policyholders, as of June 30.

The ACCC reports that almost $2.7 billion was paid directly into customers’ bank accounts, with a further $1.9 billion returned through premium relief, such as deferred or cancelled price increases.

Savings were also returned through the rollover of extras limits to the following year, financial hardship packages and expanded cover to include “lung and chest” problems.

The Australia Institute welcomed the ACCC figures.

“We estimated in April 2020 that insurers were in for a windfall of between $3.5 billion and $5.5 billion, an estimate that looks good with hindsight,” research director Rod Campbell said.

“Highlighting early in the pandemic the size of the windfall that insurers would receive was important in getting the government and regulators to ensure savings were eventually returned to policy holders.”

Insurer groups also welcomed the new ACCC data. Members Health Fund Alliance described the figures as “unprecedented in size and scale”.

“A further small number of givebacks are planned in 2025-26, with the scheme now winding down to its conclusion, some five years after the arrival of Covid-19,” it also noted.

Private Healthcare Australia chief executive Dr Rachel David said “it was in funds’ interests to prioritise members’ health and wellbeing”.

“Health funds also invested millions of dollars in Covid-19 support programs focusing on members’ mental health and wellbeing,” she said.

According to PHA, since the pandemic Australians have signed up for private health insurance “in record numbers” and more than 15 million Australians now have private health.

At the start of the pandemic, insurer groups denied the industry was set to receive major savings from lockdowns. In an August 2020 statement, David rejected “any suggestion that health funds [would make] ‘windfall gains’ from Covid-19 restrictions”.

News outlets, such as The Australian Financial Review, scoffed at the Australia Institute’s 2020 analysis estimating the windfall for insurers.

The Australia Institute’s analysis was dubbed “paltry” and a “premature shot” at health insurers.

“It’s nice to see our figures supported,” Campbell said.

“It’s even nicer to know that policy holders have been treated fairly.”

This article first appeared in The Point. Read the original here