The number of customers with top hospital cover is going to fall, as they cannot keep up with premium increases, according to the national body representing health insurance providers, Private Healthcare Australia (PHA).
Already, at Western Australia's biggest private health fund, HBF, the number of customers with top hospital cover has halved in the past five years.
PHA's Chief Executive Rachel David, in her response to a Senate inquiry on the industry, said that private cover was forecast to become too expensive for many existing policy holders over the next five to six years, reported ABC Online.
“Premium increases above CPI are hurting consumers in a low wage growth environment,” Ms David said. “In five to six years, price sensitivity modelling shows that premiums will potentially become unaffordable for at least one-fifth of people with private health insurance.”
The group’s submission highlighted that more than 13.5 million Australians have private health insurance and more than half have a disposable income of less than A$50,000 (US$39,800) a year.
“Many of these are full pensioners and superannuants who are making considerable sacrifices to maintain their health insurance,” Ms David said.
The Senate standing committee on community affairs is conducting an inquiry into the value and affordability of private health insurance and out-of-pocket costs. The committee is expected to submit a report in November.