Calls for government to force insurers to drop health premiums

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The Medical Technology Association of Australia (MTAA) has called for the government to force private health insurers to drop premiums this year as national participation rates continue to decline.

MTAA chief executive Ian Burgess said more than two million Australians had dumped their private health insurance in the past five years and Tuesday’s figures from the Australian Prudential Regulation Authority (APRA) confirm the trend is continuing, with only 44 per cent of Australians now covered.

At the same time, the APRA data shows private health insurance profits before tax increased 14 per cent over the past 12 months, from $1.6 billion to $1.8 billion.

This is despite the price of medical devices paid by private health insurers dropping by up to 38 per cent in the past three years due to government reforms, including another round of price cuts on 1 February 2020 for technology treating heart and lung disease, diabetes, bone cancer, severe arthritis and eye trauma.

“It’s clear private health insurers would rather drop customers than drop their prices and profits,” Mr Burgess said. 

“Private health insurance premiums have grown faster than national house prices over the past decade.

“It’s a safe bet that the first private health insurer whose premium (rises) go below zero will increase their market share overnight.

“Surely that’s a better investment than health funds spending more on marketing to squabble over fewer customers?

“Private health insurers haven’t paid one extra cent for medical devices over the past two premium years, despite raising premiums twice (the rate of) inflation.

“The number of Australians dropping out of private health insurance is quickly snowballing into an avalanche and it’s time for the government to step in and save private health from itself.”

Health insurance premiums will increase by an average of 2.92 per cent on 1 April 2020, which will mean that many policyholders will be asked to pay an average of $103.40 extra for the same level of cover.

To receive an independent obligation-free quote for your health insurance visit healthinsurancecomparison.com.au.

Have you reached a tipping point with your private health cover? Do you believe the annual prices rises are justified?

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Written by Ben

33 Comments

Total Comments: 33
  1. 0
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    Research has shown to be useful when shopping for new Health Insurance, some Insurers are owned by overseas companies, some not for profit, some owned by the members etc… Although changing to a new one is daunting, in my case it has saved me hundreds of dollars. It was very much worth the inconvenience.

    • 0
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      Rosy. Can you advise which or at least some of the insurers that are in each category. That is overseas companies, not for profit, owned by the members etc

    • 0
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      I agree with john, maybe this website should be used to suggest good insurance companies, if there are any, where premiums will be lower but with similar adequate cover.

    • 0
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      seeing as no-one here or at YLC seems to know which are the lowest cost insurance companies. Or capable of doing some sort of comparison maybe we should all just refer to Choice magazine. !!

  2. 0
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    Health insurance is a scam. This rapacious industry has killed the goose that laid the golden egg: people, understandably, are leaving in droves.

  3. 0
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    My premiums going up by 6.6% and have always consistently been significantly higher than inflation. If you have any shares in any of the big private health insurers I suggest you bail out.

  4. 0
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    All you can do is to change health insurance providers closer to the time. Do not go wit the big ones. Even if you save $ 5.00 is worth it if you are pensioner. I used my health insurance quite bit last year due to serious illness and would no go without It is time t health insurers sopped asking an increase in premiums.

    • 0
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      I can accept reasonable increases, the procedures in hospital are certainly different to what they were only 15 years ago. If all of us would be part of the system without being able to opt out, the costs overall would be cheaper. I grew up in a system where we all had to have health insurance by law, maybe the reason I am not against the industry as much as people who are used to get everything for free on Medicare.
      In my neighborhood we do have waiting lists and very long ones for certain operations like cataract removals. Some mates are paying $3000 per eye in cash to escape the 3 year wait. We have good public facilities but they just cannot cope with all these pensioners wanting treatment.

  5. 0
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    All you can do is to change health insurance providers closer to the time. Do not go wit the big ones. Even if you save $ 5.00 is worth it if you are pensioner. I used my health insurance quite bit last year due to serious illness and would no go without It is time t health insurers sopped asking an increase in premiums.

  6. 0
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    Don’t expect this government to take any action. Look at the time it took to get the Royal Commission into banking. Morrison said 27 times it wasn’t need. How good is his word?

  7. 0
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    Don’t expect this government to take any action. Look at the time it took to get the Royal Commission into banking. Morrison said 27 times it wasn’t need. How good is his word?

  8. 0
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    Without all these insurance increases we could possibly live without the part pension. Our combined insurance bill is about $7000 per annum (health insurance is the biggest, followed by body corp, consisting mostly of insurance premiums since we have no lifts or pool). The Govt sold our Insurance Provider, Medibank, and now they will want to make a profit. Buying it back is not possible. At our age we cannot afford to get out of Private Health.

  9. 0
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    Lower prices under a Liberal Government you must be joking it is not in their make up.All the Libs will ever do is sell all we own to overseas companies that charge as much as they can and when that fails just move on.While having a medical check up a week ago i was told i was silly to be in a health fund as they are just a rip off.

  10. 0
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    Private Health Insurance should only be offered via a not for profit organisation.
    Public company’s paying dividends to shareholders (after profit taken from private individuals) who increase premiums for “any” reason, should be barred from providing this service.

    • 0
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      Agree, sanity, however the horses bolted a long time ago!

      All one can ask for now is a Royal Commission into this rip-off industry where there are many gaps while insurance also keeps going up. The Govt also encourages those gaps by keeping their contributions low, and allowing medical specialists to charge uncontrolled levels of fees. This industry is based on a completely ridiculous concept!

    • 0
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      People who take out insurance have the choice.
      DO NOT take out cover from Public Company’s.
      Individuals can chose.

    • 0
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      People who take out insurance have the choice.
      DO NOT take out cover from Public Company’s.
      Individuals can chose.

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