Should consumers subsidise natural therapies?


Health funds are paying benefits for natural therapies that aren't backed by medical evidence.

bottles used for natural therapies next to mortar and pestle

'Evidence lacking'


In 2015 a government report concluded that 17 natural therapies offered through health insurance hadn't been proven to work on patients. And yet the government subsidises such treatments through the private health insurance rebate – which is funded by taxpayer dollars. 

Should taxpayers really be paying for these treatments?

Many health experts say taxpayers should not be subsidising health insurance for non-evidence based therapies, but nothing has happened since the 2015 report.

What the review found

The purpose of the review was logical enough: to ensure that the natural therapies the taxpayer funds by way of the $6 billion-plus rebate on health insurance premiums "are underpinned by a credible evidence base that demonstrates their clinical efficacy, cost-effectiveness and safety and quality".

The report concluded that "such clear evidence has not been found", and that therapies not underpinned by a robust evidence base should have the rebate on private health insurance premiums – currently up to 26% – withdrawn. So far, that hasn't happened.

"The minister at that time [Sussan Ley] did not implement the report's conclusion that the private health insurance rebate should be removed for non-evidence based therapies, saying it was a Labor-initiated review and it would not save much money," says Professor Ken Harvey, one of the two consumer representatives on the review.

Find the best extras insurance cover with our online review of policies from 34 health funds, including Medibank, BUPA, HBF, HCF, NIB and more.

The natural therapies investigated

The 17 natural therapies under scrutiny in the review were:

  • Alexander Technique
  • Aromatherapy
  • Bowen therapy
  • Buteyko therapy
  • Feldenkrais
  • Herbalism
  • Homeopathy
  • Iridology
  • Kinesiology
  • Massage therapy
  • Naturopathy
  • Pilates
  • Reflexology
  • Rolfing
  • Shiatsu
  • Tai chi
  • Yoga

"In most cases the quality of the overall body of evidence was not sufficient to enable definite conclusions to be drawn about the clinical effectiveness of the therapies," the report says.

Harvey explains: "The natural therapies examined in the review included the Alexander technique, massage, tai chi and yoga, which were found to have some limited supporting evidence. For example the latter two certainly help to keep people active, but disease prevention was not the focus of this review."

The debate continues

Efficacy aside, Dr Rachel David, CEO of Private Healthcare Australia, a peak body representing 20 health insurers, says reducing the rebate paid on extras policies would make them more expensive and result "in less preventative treatment being undertaken and more strain placed on the hospital system".

She says: "Australia's health funds paid $4.9 billion in benefits for General Treatment [extras cover] in 2015–16 including $2.5 billion for dental, $800 million for optical and $400 million for physiotherapy. Benefits paid for natural therapies comprise less than one percent of all benefits paid by health funds."

But Leanne Wells, CEO of the Consumer Health Forum, says while she believes the savings would not be substantial, natural therapies and the other therapies reviewed "would not meet the benchmarks set for interventions funded under PBS and MBS". She says: "We believe that insurers should remain able to cover non-evidence-based 'natural therapies', however these therapies should not be eligible for taxpayer funded coverage (the rebate). We take this position as treatments covered by the MBS and PBS are subjected to rigorous testing for effectiveness whilst natural therapies are not."

CHOICE verdict

Extras cover is the most common reason consumers take out private health insurance, according to a national CHOICE survey of 1027 Australian private health insurance policyholders in April 2017.

Consumers have complained to CHOICE about the inclusion of unproven medical treatments in extras policies, including heath funds' subsidies for treatments by:

CHOICE strongly supports an evidence-based approach to extras insurance. Currently, consumers can't opt out of subsidising unproven treatments in order to receive insurance for medically proven treatments such as optometry, physiotherapy and dental.

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