Premiums won’t rise, says govt

THE Federal government has promised health fund premiums won’t rise and may even fall under reforms that will categorise policies into four new tiers.

Under the biggest reforms to the system in 20 years, all health fund policies will have to be sorted into Gold, Silver, Bronze or Basic tiers to simplify the system and make it easier for consumers to compare policies and understand their coverage.

Announcing the reforms yesterday, Health minister Greg Hunt and the insurance lobby group Private Healthcare Australia promised the changes due to take effect next April would not push up premiums and could reduce them.

“These reforms will have an overall neutral to -0.3% impact on premiums compared to current policy settings,” he said.

But the Consumers Health Forum Australia took issue with the claim and said some policies may well go up.

An analysis of the reforms prepared for the government by consultancy firm Deloitte shows Silver policies could rise by 12.3 per cent and Gold by 8 per cent under the reforms while premiums for Bronze policies would not rise.

Health fund membership has been diving with consumers struggling to afford the product as the cost of premiums soared by three times the inflation rate.