Our organisations are acutely aware of the importance of assisting people to return to work after illness or injury. Appropriate funding for rehabilitation is critical.
Financial Rights have heard from many callers on the Insurance Law Service line who inquire about why their insurer cannot assist them in reimbursing their rehabilitation program or return to work costs, or assist in covering the gap between Medicare or their health insurance and their life insurance. However, on balance we are not convinced the industry proposal will lead to better consumer outcomes.
There are significant issues that would come into play if life insurers were to play a larger role in rehabilitation – particularly the obvious conflicts of interest that arise with life insurers having a financial interest in encouraging rehabilitation even where it may not be appropriate, in order to decrease or cease ongoing IP or TPD payments. The protection, support and best interests of incredibly vulnerable consumers must be front and centre of any proposed reform in this area.
As a first priority the committee should consider the adequacy of government support for rehabilitation programs and Medicare programs. The risk of disability and its impact on employment can impact anyone; likewise the solutions to these problems need to be universal. The piecemeal approach to policy in this space has clearly created gaps and inadequate access to rehabilitation services. The solution is not to add another layer of complication, but to address the lack of universality in the existing response.
To that end, an industry led response will never be capable of providing a universal solution, as it relies on people purchasing individual cover. Consumers and taxpayers will be better served by different approaches that keep life insurers out of the rehabilitation space.
