Labor plans to cap private health premiums if it wins election

Labor will cap private health insurance premiums should it win the next election.

Labor plans to cap private health premiums if it wins 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?

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    codger
    5th Feb 2018
    10:48am
    of course premiums are too high, just more greed from multi national companies that prey on the misfortunes of the Australian people
    MICK
    6th Feb 2018
    3:00am
    So why were they not capped 10 years ago? They should have rather than allowing health companies to plunder citizens.
    koshka
    16th Feb 2018
    9:15am
    but have you considered how much Private Health providers charge...that the PHF have to pay?...Some ethics about this Liberalism should be introduced...
    VeryCaringBigBear
    5th Feb 2018
    11:14am
    If premiums don't rise then what they pay out must fall to balance their books. So it's just a smoke screen.
    Blossom
    6th Feb 2018
    11:31pm
    Some of what it is excess pays for the exorbinant increase in cost of the equipment they use in their practise / medical centres. They can't risk using sub-standard equipment and it malfunctioning.
    patti
    5th Feb 2018
    11:15am
    I have known this since 2009, when I was told I would need to find $6000 to cover the gap, if I had my total knee replacement done privately. As a pensioner, there was no way. So wondering why I struggled to pay hospital cover premiums for so long, I cancelled my health insurance and have since been in the Public system. Yes, you might have to wait longer.....but not everyone has discretionary money lying around. Appalling!
    Puglet
    5th Feb 2018
    5:52pm
    Patti for the same surgery I paid less than 1000.00 ‘excess’. Most of these ‘extras’ are incurred because surgeons and anaesthetists charge considerably more than the re-Imbursable scheduled fee. I had to pay extra for physio, hydrotherapy and a single room etc. HBF has a list of ‘preferred’ doctors who only charge the scheduled fee.
    Blossom
    6th Feb 2018
    11:28pm
    Puglet,
    It seems most Private Health Funds have a "preferred" list, not only of Doctors, but also Hospitals some of them relating to the procedure you are having; also if it is day surgery or you are being admitted.
    Jim
    5th Feb 2018
    11:17am
    We have had posts on this before, I asked the question last time, no one seemed to know the answer, so here goes again, quite a lot of the health funds are not for profit health funds, so I am assuming those health funds must be owned by the members or put any profit back into the fund, these funds still put up their fees the same as these big multi national companies, the premiums are similar in most funds, so I think someone is telling porkies, I have been in various funds over the last 50 years, the return from every fund seems to have decreased over the years, I am sure someone will have some positive stories about their health fund, but it seems strange to me that these not for profit funds who are not paying out millions of dollars to share holders are still increasing their fees by a similar ammount and still only give similar refunds on services, so does that mean that these funds are so badly and inefficiently run compared to funds that make a profit, or is someone salting the money away for a rainy day. I think the true cause of increasing premiums is as a result of greed from a few quarters, one of which is specialist doctors.
    Puglet
    5th Feb 2018
    6:11pm
    I belong to HBF a non-profit. It is a bit cheaper than Medibank Private but not my much! I don’t have complaints about it - rarely have to pay ‘extra’. On many occasions ‘Gap Saver’ means I don’t have to make any extra contribution at all - dental, physio etc. While i can afford it I’ll paying all that money, especially since i’ll need cataracts done and a hip replacement before too long. You are right though - specialist fees plus over-servicing lead to huge increases. Patients in the public sector with the same conditions have far fewer very expensive tests and procedures but outcomes are just as good if not better than private care. I also suspect HBF is top-heavy with high salary bureacrats. I’ve tried to find out what these many million dollar salaried people do for our largesse with no luck. The luxury cars they keep in their drive ways are a good hint.
    KB
    5th Feb 2018
    11:35am
    It is high time that premiums were capped. Major insurance companies are simply greedy and looking after their own interests, If it my insurance go over 80 then I will have to drop insurance. We need affordable health insurance. If everyone drops insurance then and people need joint r replacement s then the public waiting list will grow longer. Not good if you are in pain
    VeryCaringBigBear
    5th Feb 2018
    12:13pm
    Health insurance is going the same way as electricity in that the more people who pull out the higher they have to rise their premiums to remain viable.
    Rae
    5th Feb 2018
    2:05pm
    Yes and as prices do rise more will bail out and the systems will collapse. Why the LNP want to turn us into a failed state is the question. What is in it for them?

    Other countries can run decent public health systems without this private insurance at all.
    Jim
    5th Feb 2018
    7:06pm
    Rae, just on the question of other countries, it might interest you to know that the UK was ranked No 1 in the world for health care Australia was ranked No 2 the figures were arrived at with the U.K. finishing top in 5 categories and Australia finishing top in 4 categories the total categories was 9 ie between them they topped every category, this study was done on countries with free public health systems, the U.K. is having exactly the same argument about health care that we are having here, it is the labour opposition in the UK that is pushing the scare campaign led by their extreme left wing leader Jeremy Corbyn. Many people might think that the UK doesn't have a private health system, they do, the largest is Bupa.
    There are very few countries that have a completely free health system, ours is amongst the best.
    micky d.
    5th Feb 2018
    12:46pm
    I cannot say with any certainty but I do believe that Health Funds try their best, because of their competitive structures, to give best value.
    I think that the real beneficiaries of the increases are, in the main, the private hospitals together with surgeon's and specialist's incomes. See the collosal expansion of first class accommodation etc. We enter the world of oppulence and luxury when dealing with these providers.

    I will certainly not "knock" my Health Fund. I forgo many pleasures to be able to afford my contributions and I"m darned grateful to have them. I will tighten my belt even further to ensure the privilege of this cover.
    Rae
    5th Feb 2018
    2:08pm
    Fine if you are getting service. I pay $2200 a year now to subsidise the unwell and it is at the top of my cancel list if prices keep rising and income falling.

    Once the healthy walk away I suspect many funds will collapse.
    They are pricing themselves out of business.
    Lark Force
    5th Feb 2018
    4:28pm
    Strip off, get on trolley, have procedure, go home. 3 hours worth and the private hospital charge for a whole day. The same occurs if you go in at say 10am and out again by 2:30pm. Next please!
    At this rate they could get 3 patients through in 24hrs. Nice earner.
    micky d.
    5th Feb 2018
    12:46pm
    I cannot say with any certainty but I do believe that Health Funds try their best, because of their competitive structures, to give best value.
    I think that the real beneficiaries of the increases are, in the main, the private hospitals together with surgeon's and specialist's incomes. See the collosal expansion of first class accommodation etc. We enter the world of oppulence and luxury when dealing with these providers.

    I will certainly not "knock" my Health Fund. I forgo many pleasures to be able to afford my contributions and I"m darned grateful to have them. I will tighten my belt even further to ensure the privilege of this cover.
    micky d.
    5th Feb 2018
    12:46pm
    I cannot say with any certainty but I do believe that Health Funds try their best, because of their competitive structures, to give best value.
    I think that the real beneficiaries of the increases are, in the main, the private hospitals together with surgeon's and specialist's incomes. See the collosal expansion of first class accommodation etc. We enter the world of oppulence and luxury when dealing with these providers.

    I will certainly not "knock" my Health Fund. I forgo many pleasures to be able to afford my contributions and I"m darned grateful to have them. I will tighten my belt even further to ensure the privilege of this cover.
    micky d.
    5th Feb 2018
    1:06pm
    I apologise for the repeat of my post ( 3 X). A glitch.

    5th Feb 2018
    2:14pm
    What a stupid vote buying policy
    This fuckwit funds more ways to waste taxpayer money and screw the economy
    Rae
    6th Feb 2018
    7:32am
    How is capping increases going to screw the economy?

    I would think outrageous increases in insurance, electricity, rates etc will cause the real problem as disposable income collapses and then businesses in your town start going bankrupt for lack f customers.

    Private insurance has almost doubled in price over the past decade.
    A decade of very low inflation and stagnant wages. There is no reason for it.

    Hey let's not help people but throw 65 billion at foreign corporations and governments that they sold all our assets to. Much better waste of funds. The LNP certainly know how to screw over low income earners again and again and again.
    Anonymous
    6th Feb 2018
    4:47pm
    Because it’s basic economics which you lefties refuse to understand
    Price controls work against market forces and will result in the case of insurance - poorer service and coverage

    Quite simple actually but obviously not marxists like you and Shortbrains
    Anonymous
    24th Mar 2018
    10:00am
    Yes, Raphael, let the thieving bastards in powerful positions rip everyone off just because they can. Market forces worked when people had ethics and integrity. No more! Greed has taken over.

    When a doctor can reap $455,000 a week for a simple 15-minute procedure, saying ''well, do you prefer to stay sick or pay my price'' there is something seriously wrong with society and capitalism is failing dismally.

    If we could return to RESPONSIBLE CAPITALISM, and somehow restore respect, empathy, integrity and ethics, I would agree with your politics. Given that it's not going to happen anytime soon, I don't know what the solution is. It sure isn't socialism or communism. Shorten hasn't got any answers. The LNP is destroying society with its Robin Hood in reverse policies taking from the poor to give to the rich. Seems there ARE no viable solutions. Maybe the Jehovah's Witnesses are right. Man cannot be trusted to govern, and we just have to pray that God (if there is one) takes over very soon!
    The pom
    5th Feb 2018
    2:21pm
    Typical politician promise without working out the ramifications of the scheme. If he can stop hospitals and specialist racking up their costs by far more than the amount he proposes to cap good luck to him, but I reckon just another politician blowing in the wind about a subject he hasn't mastered.
    floss
    5th Feb 2018
    3:33pm
    What a good idea it is worth a try it can't get any worse.The excuse for a government we have now has failed to stop any increases in health insurance and never will.
    Jim
    5th Feb 2018
    4:21pm
    Reports are that health insurance has gone up by 40% over 10 years, I seem to recall that there were some significant increases under the previous labor government, so I don't think that any side of politics has clean hands. As for Shorten's promise to limit rises to 2%, how does he propose to do this and who is going to foot the bill for the shortfall, Shorten is making promises that have no costings attached this is just another one to buy votes. In my earlier post I have made the point that not for profit funds are raising their premiums by a similar ammount as the for profit funds, so what is happening to the extra money that the not for profit funds must have available to them, they are certainly not going into better returns for their members. Something smells and the stink applies to both sides of politics.

    5th Feb 2018
    4:57pm
    This report is wrong. Shorten said that the savings of $340, which is for married couples, is over two years. It is also wrong to suggest that the government is paying $6B each year to the big insurers. The rebate is given to those who are eligible to receive it, not the insurers. By a method of bookkeeping used by the insurers, they give the rebate directly to those covered and claims it back on the government. The alternative is to have the full payment made by the taxpayer and have it claimed back once a year.

    Further, Labor's time in government saw increases of more than 6% with nothing lower than 5% and now they scream because the figure is less than 4%. Labor also reduced the rebate which is a direct hit on those insured, not the insurer. In any event, the claim that the increase is less than 4% is a farce. When we are told how much it will be individually, not what the advertised "average" is, if past rises are any indication, we will see an increase in double figures.

    I'd love to see a government that can stand up to the health insurers and insist on them providing all of the increase percentages, line by line, to show exactly how much will actually be charged. We are being ripped off without a doubt and this token gesture by Shorten will do nothing to reduce the pain we all get each April Fool's Day.
    Rae
    6th Feb 2018
    7:40am
    Yes quite outrageous they chose April Fool's Day. Shows what these insurers, mostly foreign investors, really think about the Australian people.

    Hey look down there. Gullible fools we can rip off time after time and they are so dumb and fearful they'll just keep paying up.

    The government will help just offer a few cushy post politics jobs and a Cayman account and they'll do anything to help us rip off this Nation.
    koshka
    6th Feb 2018
    9:49pm
    Until now I was thinking that the PHI were too high and they really are but since I have been in Hospital and found out the amount these profitable business charge I have switched my mind. Private Hospital are charging as 5 stars hotels but their service is below standards. I understand now why so many people just don't get Private H. Insurance...The government should investigate the reason way these hospitals are so expensive...as well as some doctors´ gaps. Viva the unethical Liberalism!!! Profit above morality. Sickening, really
    Kiki
    16th Feb 2018
    8:36am
    When the Labor Party was in government it did nothing to curtail private health insurance premium rises and it cut into the government rebate for premiums. Why now would they decide to change their stance? Labor doesn't like private health insurance; they want everything to be socialised.
    koshka
    16th Feb 2018
    9:11am
    ...and what about to review private hospitals charges which are astronomical... and some surgeon docts. as well...´No doubt that business have to make profits but should be some ethics consideration to this unhumanised materialist Liberalism

    24th Mar 2018
    9:55am
    Labor would do better to investigate WHY premiums are so high and do something about rip-offs by service providers. A recent minor procedure in Day Surgery cost my partner $3710 over and above the Medicare rebate. If the specialists had charged the Medicare Rebate, their remuneration for a very simple 15-minute procedure would have been over $800. They boast one specialist does about 100 a week of these procedures. That's over $80,000 a week at the Medicare rate, and a whopping $455,000 a week at their current charge rate. Surely this cannot be justified!