The Government’s announcement that the average premium increase for Private Health Insurance Funds will be 5.59%, the lowest increase in four years, demonstrates the industry’s commitment to keeping premiums affordable for its members.
Private Healthcare Australia Chief Executive, Dr Rachel David, said “funds take the issue of premium increases very seriously and the industry has repeatedly shown its willingness to keep premiums as low as possible, demonstrated recently by funds who have resubmitted applications seeking lower premium increases.”
“In addition, health funds are working with Government and other stakeholders to reform prostheses pricing regulations, on measures to remove red tape and make health fund products more transparent and easily understood by consumers,” she said.
Dr David said keeping premiums affordable was critical for the ongoing viability of private health care in Australia and that reforming prostheses pricing regulations was crucial as private patients are currently paying too much for medical devices such as hip and knee joints.
“Private health funds have given the Government a cast iron guarantee that reforming prostheses pricing, so that Australians are no longer forced to pay in some cases up to five times more than international consumers, will reduce pressure on premiums. In fact, by addressing this unfair cost burden on private patients, the Government can save the Australian health system an estimated $800 million annually.”
Dr David said the costs of healthcare in Australia were increasing across the board as a result of our ageing population, growth in chronic disease, advances in medical technology and higher charges by healthcare providers.
“While no one likes to see premiums go up, most people accept a reasonable increase as necessary to ensure they can continue to access the private healthcare system. Members understand that health funds must hold sufficient reserves to pay out on claims made by members, now and in the future.”
During 2014-15 there was a 7.2% increase in benefits paid out by health funds while the premium increase was 6.18%, further demonstrating that the industry is working hard to keep premiums as low as possible, by introducing efficiencies into their own operations. Funds paid a total of $18 billion in benefits in 2014-15 on behalf of their members, including:
- $13.32 billion in hospital treatment – up 7.6 % on the previous year
- $4.55 billion in general treatment – up 6.3% on the previous year
- $1.89 billion in payments for prostheses – up 8.9% on the previous year; and
- $2.1 billion payments for medical specialists – up 7.1 % on the previous year.
“More than 13 million Australians rely on private health cover to ensure they receive the best available health care where and when they need it. With approximately two-thirds of elective medical procedures being funded through the health funds, the sector is a critical pillar of Australia’s health system,” said Dr David.
Media contact: Jen Eddy 0439 240 755