Health insurers are paying considerably less for medical equipment, so why are prices rising?
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.
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