Health cover pain on the way

CASH- STRAPPED families will be hit with a health premium rise double the rate of inflation, despite insurers brokering the lowest rise in 15 years.

The April 1 increase will add about $200 a year to a family’s health insurance bills.

However, it would have been far greater had health funds not benefited from cuts to the cost of medical devices such as hip and knee replacements and a reduction in the number of payouts.

The last time health fund premiums rose by less than 4 per cent was in 2001, after the government’s 30 per cent tax rebate that dramatically lowered premiums.

In that year, premiums did not rise at all. The following year they rose 6.9 per cent and since the average rise has been 5.9 per cent.

The slowing in premium increases follows last year’s government health fund reform package that included a $1 billion cut to hip and knee replacements.

Health funds announced $1.4 billion in profits last financial year after premiums rose 4.3 per cent and benefit payouts only 3.7 per cent.

“I’ve been for pushing for the lowest possible premiums and have made this crystal clear to the sector,” Health Minister Greg Hunt told News Corp yesterday.

“At this stage we are on track for the lowest health fund change in 15 years.”

He will have to announce the premium rise before midFebruary and health fund sources said he was pressuring them to bring in an average rise of less than 4 per cent.

After receiving the funds’ annual premium rise bids late last year, Mr Hunt asked many funds to reassess and lower the rises they were seeking.

Private Healthcare Australia chief Rachel David said this year’s average premium rise was on track to be under 4 per cent.

BUPA chief Dwayne Crombie said any premium rise of under 4 per cent this year would be a one-off unless the government embarked on further major reform of the private health system in a way that cut costs.