Health insurance funds say that they are unable to guarantee that premium rises will not soar higher than inflation despite their winning over A$1 billion (US$786 million) in savings under health reforms announced last week.
But the Medical Technology Asociation Australia, which agreed to lower the price of implanted medical devices, said insurers must commit to price rises no higher than inflation.
“This is an industry that already gets A$6 billion in taxpayer subsidies every year, has increased profits by more than 17% last year and has consistently increased prices above inflation every year. Premiums have risen by 55% since 2009,” the association said.
Health Minister Greg Hunt said in a government statement last Friday that the government has entered into an agreement with the Association to lower the price of implanted medical devices from 1 February next year.
“This will have immediate benefits for consumers in the form of lower premiums from April,” he said, but would not put a figure on how much that will fall. He said however that the government has been working with the private health insurers which have guaranteed in writing they will pass through all cost savings.
Private Healthcare Australia has estimated that the A$181 million cuts to the prices which funds pay for medical devices like hip and knee replacements should reduce next year’s premium rises, reported News Corp Australia Network. The average increase in health insurance premiums stood at 4.84% this year. Premiums have increased an average of 5.6% a year since 2010.
The insurers warned that unless they get an additional 50,000 young members as a result of a new 10% price discount to be granted under the reforms, older health fund members will have to pay higher premiums to cover the cost of the incentives.