Labor will cap private health insurance premiums should it win the next election.
The Federal Opposition has announced it will cap private health insurance premiums at two per cent a year for two years, should it win the next Federal Election.
Labor also announced that it would initiate a Productivity Commission report on the sector, after Opposition Leader Bill Shorten said the industry was becoming “a con”.
Labor’s proposal could save families up to $340 per year and would benefit around 13 million Australians.
Describing the proposal as "a cost-of-living measure” during his first major speech for 2018, Mr Shorten condemned the private health sector for profiting from “massive” increases in premiums during record low wage growth – when Australians could least afford it.
"The idea that taxpayers pay $6 billion a year to the big insurers, the idea these big insurers are making record profits and yet the premiums keep going up and up, it can't be sustained," said Mr Shorten.
"Wage growth is at an all-time low. But the profits of private health insurers are at an all-time high. Australians are being ripped off – it’s time to shift the balance back in the interests of families, rather than the big health insurance companies. Prices are up, profits are up – but quality and value are way down."
YourLifeChoices research shows that 76 per cent of Australians over 55 are concerned that the cost of living is rising faster than the official inflation rate. Around 80 per cent are worried that they will run out of money before they die. Over seven in 10 older Australians currently have private health cover, but only 60 per cent say they will be able to maintain the cost throughout retirement. So, Labor’s plan should be well received.
Prime Minister Malcolm Turnbull claims that Labor is delivering “policy on the run”, saying the most recent premium hike of four per cent was one of the lowest in years and that the sector is okay as it is.
“They [Labor] do not want to do anything to encourage the private health sector," he said.
"We have a great combination in Australia of a public health system of Medicare which is guaranteed — we have guaranteed Medicare — and also supplemented and supported by private health."
Health insurers have also weighed in on the debate, saying that caps on annual premiums would have “disastrous” consequences.
However, the Public Health Association of Australia welcomed the move, saying that Labor’s plans are a “sensible way forward” and the private health insurance industry’s warnings are nothing but “scare tactics” and attempts to look after their own interests.
"The focus of this industry is on profits and return to shareholders rather than the health of all Australians," said Public Health Association of Australia Chief Executive Michael Moore.
Do you welcome Labor’s proposal to cap private health premiums? Do you struggle to maintain your private health cover?