Cover to suck 20% of income

FAMILIES are spending nearly 10 per cent of their income on private health insurance, a proportion that could double by 2051 if soaring premiums are not reined in.

New research shows families are spending $392 on their private health cover every month from the average household disposable income of $4455.

The analysis, by comparison website finder.com.au, shows premiums have increased by an average of 5.42 per cent every year since 2010, almost double the rate of wage growth.

This year’s average increase of 3.9 per cent is the lowest in 17 years but is still double the average pay increase received by workers.

By 2051, families would be spending two out of every ten dollars they earned on health insurance if the trend continued.

“If increases continue at the current rate, health cover will become increasingly unjustifiable for many Australian families,” finder.com.au insurance expert Bessie Hassan said.

Opposition Leader Bill Shorten has proposed capping annual increases at two per cent for the first two years of a Labor government, prompting widespread criticism from the private health sector.

The finder.com.au analysis also showed one in five uninsured Australians had paid for treatment at a private hospital instead of waiting to get in at a public hospital.