Insurers on notice to cough up for full hospital bills

The NSW government wants private health insurers to pay their full share of public hospital stays. (Dan Himbrechts/AAP PHOTOS)

Private health insurers are being put on notice to foot the full bill of public hospital stays in NSW under new payment arrangements.

The existing system costs taxpayers almost $150 million each year after it was revealed some insurers only pay half the daily cost of a bed rate for a private patient in a public hospital, NSW Treasurer Daniel Mookhey said.

"It was an arrangement that has been in place since 2013, which meant that private health funds were meant to be paying the full rate," he told 2GB Sydney radio on Monday.

"From about 2019 onwards they all started withdrawing from paying that rate.

"In effect, the NSW taxpayer has been paying half the cost of what it takes to treat one of their members in public hospitals."

NSW Treasurer Daniel Mookhey
Daniel Mookhey has set a timeline for talks with private health insurers over public hospital costs.

Describing the set up as unsustainable, Mr Mookhey pledged to work with the industry to ensure companies pay their fair share of costs.

“We’ve got about six months to sort it out but otherwise we are going to have to take action to ensure that these funds are paying their bills," he said in a statement. 

"Every dollar (not paid) is picked up by taxpayers and it comes at the expense of other investments we should be making in our health system."

The six-month timeline comes ahead of the state budget next week.

NSW Premier Chris Minns said he was encouraged by early conversations with some private health care funds not paying the full fee.

"I don't want to put the cart before the horse and start speculating on a potential sanction when we're working well," he told reporters on Monday.

"But what I will say is some private health funds today are paying the NSW bed rate (and) it's clearly unfair if there's other funds that are trying to dip out."

Mr Minns said the government would reserve its right to take action if it was unable to get a breakthrough with some private health funds. 

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store