MLC Life backs reforms for rehabilitation

In a submission to the parliamentary joint commission on corporations and financial services, the company said it was a “longstanding advocate” of allowing private insurers to play a greater role in rehabilitation.

“Presently life insurers are only permitted to fund non‐medical rehabilitation services, such as assessments, work conditioning programs and job search assistance, and are prevented by law from funding medical treatment as part of a program of rehabilitation,” the submission said.

“MLC Life Insurance recommends these regulatory restrictions to be relaxed. Through Income Protection products (including Group Salary Continuance products) and Total and Permanent Disability products, life insurers take on the liability associated with our customers being unable to work for health reasons, for example as in the case of individual injury or illness.”

Some of the circumstances highlighted by MLC Life as areas life insurers could contribute to rehabilitation included ongoing access to a psychologist after the client’s Medicare access has been exhausted, or where a joint replacement is needed but the waiting period could affect the success of the clients’ return to work.

“Properly implemented, permitting a life insurer to have the option to act as a supplementary funder of medical treatment as part of a program of rehabilitation would benefit both the claiming customer and other customers of the insurer,” the submission said.

The company did, however, highlight the need for changes to regulation to be “carefully considered and designed” to guarantee life insurers didn’t exceed their new role.

“We caution the need to ensure that discretionary powers are left to life insurers in regards to the medical rehabilitation treatment they choose to fund so as to ensure that payments are consistent with their rehabilitation targets and strategies and so as to properly manage costs and avoid cost blowouts which would flow on to consumers and negatively impact upon industry sustainability,” the submission said.