Private health insurance premiums are set to rise by 3.25 per cent from 1 April next year – the lowest annual increase since 2001 but still enough to spark fears that another wave of Australians will have no choice but to dump their cover.
Federal Health Minister Greg Hunt said the increase would see a single person pay on average an extra $1.14 per week and a family an extra $2.35 a week.
Opposition health spokesperson Catherine King said the above-inflation price hike would force more people to abandon their cover.
“Already, Australians are downgrading or ditching their private health cover in record numbers in response to relentless price rises, soaring out-of-pocket costs and growing exclusions,” she told The Guardian.
Premiums rose by 54.6 per cent between 2010 and 2017 – 5.78 per cent in 2010, 5.56 per cent in 2011, 5.06 per cent in 2012, 5.6 per cent in 2013, 6.2 per cent in 2014, 6.18 per cent in 2015, 5.59 per cent in 2016 and 4.84 per cent in 2017 and 3.95 per cent his year.
Currently, about 13 million Australians have private health cover. In YourLifeChoices’ 2018 Retirement Matters survey, 69 per cent of 4989 respondents said they had private cover and 81 per cent said they hoped to maintain it for life.
In its annual review of the industry, the Australian Competition and Consumer Commission (ACCC) reported that in the 2017-18 financial year, Australians paid $23.9 billion in premiums – $834 million more than in 2016-17.
“People are increasingly feeling the pinch of private health premium increases and growing gap payments,” said ACCC deputy chair Delia Rickard.
“In response, many are shifting to cheaper products with reduced coverage, and some are dropping their cover altogether.”
Consumers Health Forum (CHF) chief executive Leanne Wells said the increases would add about $160 a year to households costs.
“Consumers will want to see value for money for the thousands of dollars they pay out in premiums each year,” she said.
Ms Well said the CHF was expecting to soon see the outcome of the Health Minister’s review into out-of-pocket costs, arguing that more information for consumers in this area should only be the start of greater transparency.
The CHF is also seeking access to information about the performance of specialists, “such as representative data on operation outcomes of surgeons”.
Ms Wells said: “As the Royal Australasian College of Surgeons itself says, the level of fees a surgeon charges may bear little relation to that surgeon’s performance.
“Health insurance represents a sizeable share of people’s budget and given the importance of quality health care, individual performance measures should be an everyday feature of modern healthcare.”
In other money news, Moneyminded reports that under new Coalition Government reforms, Australians nearing retirement will not be taxed on part of the payment they receive if they are made redundant or receive an early retirement scheme payment.
In 2019, the reforms would see such payments aligned with the Age Pension qualifying age, which, from 1 July, will be 66, rising to 67 by 2023.
The change would mean that all individuals aged below the Age Pension qualifying age would be able to receive a tax-free component on the payment they receive from their employer in those circumstances.
Are you pleased that next April’s health cover hike is more affordable than in many other years? Have you budgeted for the increase?