Health cover price hike
HEALTH fund members will be slugged with their second premium rise in six months, paying an extra $174 a year to stay covered from April.
Health Minister Greg Hunt yesterday approved an average 2.74 per cent health fund premium rise, which he said was the lowest since 2001.
But for many health fund members it will be the second hike in six months following October’s premium rise, which averaged 2.92 per cent. Health funds delayed premium rises scheduled for April 1 this year because of the COVID-19 surgery ban and a drop-off in attendances at dentists and physiotherapists during lockdown saved them nearly $1bn.
Surgery rates and extras use picked up once the lockdown ended but the consumer watchdog estimates funds still saved close to $500m this year.
Health funds claim they returned that money to members by allowing them to defer premium payments and access cover for COVID-19-related illnesses.
Delayed premium rises went ahead for most fund members on October 1.
And some members, particularly those with Gold and Silver policies, faced premium rises of up to twice the “average” announced by the federal government.
In October, the nation’s largest health fund Medibank hiked the price of some of its Gold policies by 6.7 per cent and many Silver Plus policies by 5.9 per cent.
Bupa, Australia’s secondlargest insurer, increased the cost of one Silver policy by 5.6 per cent in October.
News Corp Australia has revealed the so-called “average” 2.74 per cent premium rise figure – used by the government – is misleading.
It is not an average of the premium rises of the policies offered but instead the percentage rise in premium income that health funds receive.
Mr Hunt said the 2.74 per cent average industry change from April 1, 2021, was “the lowest change in 20 years”
It was “over 50 per cent lower than premium rises under the previous Labor government,” Mr Hunt said.
However, a spokesman for consumer group Choice said “the average increase may be lower than other years but people should check how much their specific policy is going up as it will vary. Some funds have average increases up to 5.47 per cent.”
“Minister Hunt’s approval of this industry’s price hike will no doubt make people consider dropping their coverage,” Choice’s Dean Price said.
Private Healthcare Australia chief Dr Rachel David said “health funds don’t want to increase premiums” but they had to go up to ensure health funds remained financially viable, met statutory prudential requirements and continued to be in a position to provide access to top healthcare.