The Productivity Commission’s recommendation to allow life insurers to fund mental health treatments is a ‘win-win’, according to the Financial Services Council (FSC).
The commission’s report into mental health had recommended under its funding arrangements section to permit treatment for insurance clients on a discretionary basis.
FSC chief executive, Sally Loane, said: “We strongly support the Productivity Commission’s recommendation that the Australian Government should permit life insurers to fund mental health treatments for their income protections and total and permanent disability insured customers on a discretionary basis. This is a policy the FSC has long advocated for.
“A well-designed funding arrangement, with the appropriate safeguards to ensure that consumers and their treating doctor are placed at the centre of the decision-making process, will help improve health and wellbeing outcomes for consumers and help to reduce the claims costs for life insurers to help keep premiums more affordable for all customers. We see this as a win-win.”
The FSC said the life insurance industry played a significant role in supporting Australians with a mental health condition as it was the largest financial contributor for people with a mental illness, after the government.
In 2019, life insurers paid $1.24 billion to over 9,500 Australians for mental health claims, and mental illness was the highest cause of claim for total and permanent disability and the third highest for income protection.