Health fund chiefs rake in the money
HEALTH fund honchos have pocketed pay rises as high as 14 per cent after hitting customers with soaring premiums.
Consumers are paying hundreds of dollars a year to cover management costs of health funds, as industry bosses reap record salaries.
Profits at Medibank Private have almost doubled since the Federal Government’s privatisation in 2014 — rocketing to a record $450 million this year as the insurer jacked up premiums by 4.6 per cent.
New chief executive Craig Drummond, a former banker, earned $2.8 million in 2016-17, his first year in the job.
It included $1.5 million in salary and superannuation plus a $597,701 bonus.
On July 1 Mr Drummond pocketed a 2.3 per cent pay rise and other executives received an average pay rise of 3.6 per cent.
Most executives, excluding the chief executive, received a 14.7 per cent pay rise last year.
At NIB, the managing director’s remuneration has soared 51 per cent in five years.
NIB boss Mark Fitzgibbon earned a $3.3 million pay package in 2017, mainly due to higher payment of “performance rights’’.
NIB’s net profits jumped 29 per cent to $120 million this year, and customer premiums rose 4.5 per cent.
Health insurance giant BUPA, which is headquartered in London, keeps the pay of its Australian chief executive Richard Bowden secret.
But former global chief Stuart Fletcher earned $2.1 million before stepping down last year, while his replacement Evelyn Bourke, the former chief financial officer, earned $3 million.
BUPA’s profits from Australia and New Zealand soared 9 per cent to $559 million in 2016 after a 5.7 per cent increase in premiums last year.
Health fund customers are paying to cover funds’ management expenses, data from the Australian Prudential Regulation Authority shows.
The expenses average $839 per policy at Grand United Corporate Health Ltd, $680 at the Reserve Bank Health Society and $624 at the Railway and Transport Health Fund.
Consumers spend an average of $276 a year to cover management costs at BUPA, $299 at HBF, $284 at HCF and $265 at Medibank Private.
Australian Medical Association president Michael Gannon said it was wrong for health funds to boost profits by “reducing services to patients’’.