Australian private health insurance premiums soaring

 

Australian private health insurance premiums soaring

By
Michelle Stevens

28 March 2017

As of April 1, private health insurance premiums will rise by an average of 4.84 percent—3.3 times the official inflation rate. Prime Minister Malcolm Turnbull, conscious of the rising animosity to the yearly premium hikes authorised by successive governments, said it was the lowest annual rise in a decade. He failed to mention the cumulative increases of 28 percent since 2012 and 54.6 percent since 2009.

Premiums have risen above inflation every year for the past 17 years, making it increasingly difficult for working class people to afford private insurance. Already struggling to make ends meet, and with average wages now falling, many are being forced to consider dropping their coverage, despite fearing they will not receive appropriate care through the seriously-underfunded public healthcare system.

Official statistics show private health fund membership began to decline from June 2015, from a peak of 47.4 percent of the population covered by hospital insurance to 47 percent in June 2016. The number of people covered fell by 2,958 during that year, the first drop in 15 years.

Data from health insurance broker iSelect also showed a drop off in the number of new people aged under 40 joining health funds. This means that the average age of those covered will increase, and this will inevitably drive up premiums further because older people tend to need more healthcare.

Premiums are soaring despite more procedures being excluded from coverage or subjected to “excess” payments that require patients to pay a portion of the bills. According to market researcher IPSOS, private health fund products that exclude treatments such as obstetrics or hip replacements have grown from 1…

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