20th Dec 2018
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Another health cover exodus feared with cost increases
Author: Janelle Ward
hospital cover

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?

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    COMMENTS

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    19th Dec 2018
    3:52pm
    Yep - its a fair increase

    Wage and pension increases more than cover these cost of living increases , so no complaints

    The modest rise will help insurers pay their employees additional wages and provide a modest return to shareholders
    maelcolium
    20th Dec 2018
    11:18am
    Let us know when you come back from Mars.
    KSS
    20th Dec 2018
    1:13pm
    Sorry Lothario, wages increases will not cover these increases for everyone. In my case for example, I work for a NFP NGO and this year we got the sum of 1.8% for CPI increase . There were no other wage increases.(Note even the pensioners received more per week than we did, and they received two rises to our single raise.)

    The projected increase of 3.25% is in no way covered by my wage increase particularly when you take into account other individual increases. Health fund costs rarely match the projected increase and for the over 55s the difference can be huge (in some cases as much as 17% for older people). Add to that the increases in energy charges, transport costs (bus & train) and the myriad other increases, 1.8% pay increase does not cover these health fund increases never mind all of them.

    This year I believe more people with suffer bill shock as the funds move to the so called simpler Gold, Silver, Bronze system and people discover to retain the same level of coverage they had this year they will have to move to a more expensive tier as well as paying more on the premium.
    Misty
    20th Dec 2018
    4:45pm
    Lothario they just said on Sky News that there has been no wage increase for the last 5 years, the person saying this was from Access Economics, pensions have had a very small increase.
    Knows-a-lot
    23rd Dec 2018
    4:59pm
    Lothario is trolling for his beloved Lieberals - again.
    Julian
    20th Dec 2018
    9:46am
    Increases should not go beyond inflation or CPI values. The issue of abolishing political donations once again rears its ugly head and may help by eliminating the "back scratching" enjoyed by companies and the government.

    Rates go up but benefits dont, and in some cases, claim limits decrease.

    It'll be interesting when successive annual increases drive consumers from the market to the point where only the rich can afford it.
    Cowboy Jim
    20th Dec 2018
    10:43am
    As a part pensioner I will stay with Private Health. The $5K we spend per year in the bank would mean $15 less in our pensions a fortnight (every $1k is $3); so we bite the bullet. Full pensioners I feel cannot afford private health cover without the help of their children. None of my friends on full pensions are insured. I welcome the small increase and hope it is the way in future as well.
    Florgan
    20th Dec 2018
    10:51am
    Until there is NO out of pocket expenses, private health cover is a rip off and the increases are also a rip off
    Old Geezer
    20th Dec 2018
    11:01am
    I do pay any out of pocket expenses with my health fund. I even get better treatment in public hospitals too.
    AutumnOz
    20th Dec 2018
    2:34pm
    Agreed Florgan.
    In my opinion the only possible reason for putting up the insurance charges should be if the coverage is increased.
    The items covered never increase nor do the amounts the insurance companies pay out which is always much less than they should as all they give back to those insured is the same amount that everyone gets under Medicare.
    GeorgeM
    20th Dec 2018
    10:10pm
    Agree, Florgan, those are the bottom-line fixes in a nutshell.

    The approved annual increases should be MAXIMUM or FIXED, not "average" as that is nothing but fraud.

    The Govt has taken NO action to cover ALL Gaps, no action to control excessive fees by Medical professionals (using collusion through their Unions), and not even set their Medicare rebates at a sensible level. So, all can point the finger at each other, while the Insurance company CEOs (and doctors) win! Ah yes, and the political parties get donations!
    80 plus
    20th Dec 2018
    11:12am
    I have had to see a surgeon every year for the last three years, for a consultation in his rooms, I get no help even though I have the top and most expensive cover, his fees have risen by33% in 3 years, like wise the gap on my dental needs has risen from a gap of 40% to 50%, perhaps more help for the clients should come before share holders.
    Old Geezer
    20th Dec 2018
    11:19am
    I see a team of doctors every 12 months and get bulk billed for al the visits and all the tests done.
    roy
    20th Dec 2018
    11:26am
    Instead of moaning about shareholders, join a Mutual fund, i.e. no shareholders.
    Nomad1946
    20th Dec 2018
    12:16pm
    Your “facts” are not quite correct ...
    My health insurance rose by over 7% in 2017!,
    Nomad1946
    20th Dec 2018
    12:24pm
    We suffered higher increases in every year this stticle has quoted ... for example in 2017 our premiums rose by over 7% not 4.84 as this article suggests!!! At over $3500 pa now we dread this next increase suggested to be 3.95% .... we reckon it’ll be closer to another 7% and consequently, as pensioners, serious consideration of cover will be on the agenda .... $300 per month already ... 30% of our pension .... BLOODY OUTRAGEOUS!!!
    Not a Bludger
    20th Dec 2018
    12:54pm
    Oh My Giddy Aunt - more scaremongering and, golly gosh - maybe the sky could fall in.
    Come on YLC - what about looking on the upside instead of this constant negative blethering.
    Nomad1946
    20th Dec 2018
    5:39pm
    I take you either dont have private health cover, or still in the workforce earning a high salary .....
    Paddington
    20th Dec 2018
    1:09pm
    Elective surgery is the problem and many necessary surgeries are deemed elective. My sister recently had a stroke and all care was done through the public system including home visits. She does have private cover but this particular event was better covered publicly. So, maybe a combination is needed, that is public for some things but private insurance for knee replacements and shoulder surgery, etc.
    Specialist visits are not in the domain of the private cover so immaterial to this argument.
    Also, if you can afford to contribute to the public system then do so as private health funds chip in there as well.
    People have a right to choose their care as well.
    Bes
    20th Dec 2018
    3:01pm
    Already dropped our hospital. To get admitted we have to admitted through Emergency anyway.
    Free ambulance cover for seniors.
    Our GP admitted my wife twice earlier this year which resulted in one three and a half hour wait and the other two and a half hours. If the Triage system is busy then you drop down the queue.
    They asked if we have private health which we had. I asked why? and they told me I could use it once admitted. To do that we were up for $250.00 payment.
    So why bother once in a bed, same staff, same doctors?
    I had a partial knee replacement and had to pay the $250 because I went private.
    My mate had both knees done, same hospital, same surgeon....No Cost!
    No where near the system that we joined in the 70's.
    We can get a care plan from the GP for most anything.
    DENTAL is the biggest thing we face so kept that.
    Big drop from $159,00 to $44.00 per month!
    Old Geezer
    20th Dec 2018
    3:19pm
    Most public hospitals will waiver the $250 payment if you go private. Last time I was in a public hospital I got a team of doctors and a specialist whereas everyone else just had a hospital doctor.
    Elizzy
    20th Dec 2018
    7:07pm
    Florgan - I agree. The "gap" is outrageous. Dental insurance is a joke.
    Cowboy Jim
    20th Dec 2018
    8:27pm
    Had 2 check ups and clean as well as a filling replaced. My cost was $52, the rest was paid by health fund.
    Anonymous
    25th Dec 2018
    8:09am
    Dental insurance only covers minor and routine treatments. Anything expensive is not covered, so it's useless. I am quite happy to pay for the routine and minor procedures. Insurance should be for major unexpected costs.
    Knows-a-lot
    23rd Dec 2018
    4:58pm
    Private health insurance = scam. anybody with half a brain will dump it.
    Anonymous
    23rd Dec 2018
    4:59pm
    always suspected you've had a lobotomy
    Anonymous
    25th Dec 2018
    8:17am
    I agree, Knows-a-lot. It is a scam. When I had insurance, three surgeries in one year cost me over $10K out of pocket and the quality of care was appalling. Since cancelling, I've had first class care from excellent doctors and specialists and the costs were far less than they would have been with insurance. Specialist eye treatment at $9K would have yielded a $600 refund. Major dental at $7K would have yielded $350. And to get those refunds, I would have needed to pay over $4K in premiums PER YEAR. This year I spent a few hundred on physio that I would have recovered. Both partner and I have had trips to ER and hospital stays - all free and first class care all the way. On one occasion they called a top specialist from home and a consultation that would cost $800 in his rooms was completely free. Under private health it would have been $350 out of pocket. Overall, 6 years since cancelling, I'm over $20,000 in front, and we've had a far higher standard of care.


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