We are facing a considerable hike in health insurance premiums – seven per cent to be exact.
Following a seemingly-excessive 6.8 per cent rise in health insurance premiums last year, we are again looking at a considerable hike in April – seven per cent to be exact.
Health insurers have requested that the government sign-off on an increase of up to seven per cent, three times the rate of inflation. Tony Abbott has indicated that the government will not block the rise, responding that it is up to the market to set the price. "Certainly I don't recall as health minister interfering in this process. In the end, as I said, it's up to the market to set the price. The premiums people pay are between them and their funds", Mr Abbott told Fairfax Radio.
Health Minister Susan Ley pointed to the increases under the Labor government to explain that huge hikes were not something new. “However, it is important to point out the previous Labor government signed-off on average annual premium increases as high as six per cent during their time in office, despite their attempts to claim otherwise”, she said.
Under former Health Minster Peter Dutton, the average increase in health insurance premiums was 6.2 per cent, and was as high as 6.02 per cent under Labor in 2009.
The rise in health insurance premiums will certainly force some consumers to reduce their cover or, even, give it up all together, which causes a funding shortfall for health insurers and often leads to an increase the following April.
As cover by private health insurance falls, the slack must be covered by an already failing health system. To allow such increases could be considered foolhardy by a government which is already struggling to implement additional funding streams for Medicare. A more streamlined and mutually beneficial approach between the government and health insurers would be the best way forward. Clearly, allowing the market to set the price isn’t working.
Will increased premiums force you to reduce or give up your private health insurance? Do you think there is a better way for private health insurers and the government to manage our health system?
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