News eDaily27 Nov 2017

Australia:Private health premium hikes expected to be lower

27 Nov 2017

Private health insurance funds have reportedly sought permission from the Health Minister Greg Hunt for an increase in premiums of around 4% next year, a rate which is lower than in previous years.

In comparison, recent increases were 6.20% in 2014; 6.18% in 2015; 5.59% in 2016 and 4.84% this year.

The funds had to submit their applications for premium hikes by 10 November. If approved, the increases will take effect from 1 April 2018.

One reason for the expected lower rate of increase is that medical insurers are seeing smaller rates of increases in costs. Data from the Australian Prudential Regulation Authority show that the benefits paid for policyholders rose by 4.5% this year, slower than the 5.2% previously and the slowest annual rise since at least 2010.

Dr Rachel David, Chief Executive of Private Health Australia, the peak body representing medical insurers, said that prices would in any case be about one percentage point lower than otherwise thanks to a deal with the Federal government which slashed US$300 million (US$228 million) off the price of prosthetic devices.

The Federal government is currently considering a package of reforms designed to ease cost pressures for private insurers, which is now being scrutinised by a Senate inquiry.

Increases in medical insurance premiums combined with low growth in wages have been blamed for a growing trend of people not taking out insurance. Membership of private health insurance funds peaked at more than 47% of the population in 2015 and has fallen to 45.8% at present.


 


 

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