Hike to health cover
Private insurers impose biggest increase in five years
Almost 15 million Australians covered by private health insurance will be paying more for their premiums, which are set to rise by more than 3 per cent on average – the largest increase in five years.
On Tuesday, the Albanese government approved an industry average premium increase of 3.03 per cent, effective April 1.
Customers at the nation’s largest private health fund, Medibank Private, will see average premiums jump by 3.3 per cent, while Bupa will jump by 3.6 cent. A 4 per cent hike has been signed off for HSF, and NIB’s premiums will rise by 4.1 per cent
Policy holders with Tasmania-based Health Care Insurance will be hit with the smallest increase in their average premiums, up just 0.3 per cent, while CBHS Corporate Health members will be stung with a 5.8 per cent rise.
The 3.03 per cent figure is not an average of the premium rises of the policies offered by insurers, but instead measures the percentage rise in premium income that health funds receive. Health insurers are permitted to increase premiums annually, however the health minister must approve any rise.
The decision comes after several months of negotiations, which prompted industry concerns the decision was being delayed until after Saturday’s Dunkley by-election.
In December, Health Minister Mark Butler blocked requests by the country’s 31 health insurers for increases of up to 6 per cent, forcing many firms to resubmit proposals.
In a statement released on Tuesday, Minister Butler said he wasn’t prepared to just “tick and flick” the increases proposed by health insurers.
“I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance,” Mr Butler said.
The annual premium increase, Mr Butler added, was outstripped by the annual rate of wages growth and inflation, the benchmark for changes to social security payments.
Opposition health and aged care spokeswoman Anne Ruston said some consumers would be paying substantially more than the industry average increase, with less time to budget or shop around.
About 55 per cent of Australia’s population is covered by private health insurance, with the cost partly subsidised by government via a tax rebate that reduces as a policy holder’s income grows.
In the past year, more than $23.5bn in health and medical benefits were paid out to policyholders by health insurers.
Health insurance premiums have risen fairly modestly in recent years, climbing by 2.9 per cent in 2023, and by 2.7 per cent in both 2022 and 2021.
However, premiums more broadly have risen markedly, jumping more than 17 per cent in 2023 and making a significant contribution to measures of consumer price growth.