Aussies sick of high health premium

TWO million Australians plan to dump or downgrade their health cover ahead of premium rises, which take effect on April 1, three times the inflation rate.

It will accelerate the dangerous health fund membership spiral that started last year and threatens the long-term viability of the industry.

It puts the Federal Government under pressure to reform the industry in the budget, to put a brake on a decade of premium rises many times the inflation rate.

Insurers want to be able to offer discount premiums to young people and are calling for $800 million cuts to overpriced medical devices such as hip and knee replacements.

The government is also examining the practice of state governments cajoling people to use insurance in public hospitals – adding $200 a year to premiums.

The rise will push up the average family cover by about $200 to over $4200 and the singles cost will rise by $100 to about $2000.

At the same time the government will cut the tax rebate for insurance by $50.

Health Minister Greg Hunt says the average premium rise of 4.84% is the lowest in a decade, but members of some funds are bracing for rises almost double that.

Health.com.au members will pay 8.53% more, Health Insurance Fund of Australia will lift premiums 7.99%, the BUPA top hospital cover will rise 7.5% and Queensland Teachers’ Union Health fund by 7.30%.

Nearly eight in 10 health fund members would reconsider their insurance ahead of the premium rise, according to Galaxy Research conducted for health fund comparison business iSelect.

Two million Australians would downgrade or cancel their policy.

Of these, 600,000 would cancel their policy altogether.

One million would look to downgrade to a cheaper policy with fewer benefits.

A further 400,000 would move from a combined policy to hospital or extras only.

More than 10,000 people have already quit health cover in recent months as the high cost of health insurance burns a hole in household budgets.

From a peak of 47.4% of the population in June 2015, health fund membership fell to 46.6% in December 2016.

Any further membership falls will put greater pressure on premiums.

If young healthy people dump their cover it leaves a higher percentage of fund members being older and sicker.