The objective of this audit is to examine the effectiveness of the design and implementation of the clear read principle under the Commonwealth resource management framework.

An assurance review would examine whether the Department of Health has obtained assurance that the financial benefits from the Prostheses List reforms accruing to private health insurers have been passed on to consumers in the form of premium reductions.

The Prostheses List legislates the minimum benefits payable by private insurers (if insurance is held by the patient) for specific prostheses. As of 1 February 2018, the minimum benefit payable by private health insurers was reduced. In return for the reduction in payment obligations, private health insurers advised that every $200 million in prostheses benefits reductions will decrease private health insurance premiums by one per cent.

Private health insurers submit applications to the Minister for Health for premium increases at the same time each year. Each application is examined by the Department of Health and the Australian Prudential Regulation Authority. This process is known as the annual premium round. Premium changes take effect from 1 April each year.