Starting this week, private health insurers are prohibited from providing benefits for a number of natural therapies. This includes aromatherapy, Western herbalism, homeopathy, naturopathy, pilates, reflexology, Rolfing (soft tissue manipulation), Shiatsu, tai chi, yoga, and half a dozen others.
The goal of these changes is to stop taxpayers subsidising these therapies. But the way the changes have been legislated will have a lot of unintended consequences.
Why were some therapies removed?
The therapies were removed after a 2013 government review couldn’t find significant evidence for the clinical effectiveness for these therapies.
Based on the review, a ministerial committee concluded these therapies should no longer attract taxpayer subsidies as part of private health insurance.
Taxpayers subsidise natural therapies via the private health insurance rebate, which covers around 25% of the cost of premiums.
This rebate itself is controversial. It costs the government around $6bn a year and many experts have questioned whether it’s an effective use of taxpayer funds.
However, current government policy is to subsidise premiums. So ensuring taxpayer funds are focused on therapies that work is a worthy goal.
How does the legislation prohibit therapies?
Government subsidies for private health insurance premiums are governed by legislation, with practical considerations fleshed out in regulations. Exclusions from government subsidies would usually be incorporated into these mechanisms.
Rule 3: The 16 natural therapies are defined in a list as “excluded natural therapy treatment”
Rule 8: “Excluded natural therapy treatment” is prohibited from coverage as hospital treatment