Key Points
- Health Minister Mark Butler has announced the annual private health insurance increase for 2024.
- He said the premium increase sits below annual wages and inflation rises.
- Private health provider NIB has maintained hikes above the federal figure.
Private health insurance premiums are set to increase for the 14.7 million Australians currently covered.
Health Minister Mark Butler announced the biggest hike in three years on Tuesday morning, with changes coming into effect on 1 April.
Butler said the rise in private health insurance was below the annual rise in wages.
“I wasn’t prepared to just tick and flick the claims of health insurers, as the Opposition asked me to do,” he said.
“I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance.”
How much are private health insurance premiums increasing by?
The federal government has approved an average industry premium rise of 3.03 per cent.
The increase in 2024 is slightly higher than a rise of 2.9 per cent in 2023 and 2.7 per cent in 2022 and 2021.
Why are they increasing?
The insurance premiums paid by Australians need to cover any increase in wages and the cost of medical equipment and procedures available through private hospitals.
Butler said the increase in premiums remains below the cost for other insurance products, which will rise by around 17 per cent in 2023.
What has been said?
Health insurers had reportedly asked for an annual increase as high as 6 per cent late last year, which Butler rejected as Australians continued to face competing costs of living pressures.
Several providers have faced criticism that they are lifting prices for some policies by more than the approved rate. NIB announced a 4.10 per cent increase on Tuesday.
However, NIB’s CEO and managing director Mark Fitzgibbon said it reflects a rise in health and medical treatment costs post-COVID.
“We’re doing our best to maintain affordability yet spending is growing across healthcare, driven by an aging population, the rise of chronic conditions and the cost of new technologies,” he said in an ASX announcement.
“We’re not sitting back passively responding to inflationary pressure by simply lifting premiums. We have a range of new measures designed to help members maintain good health as well as reduce out-of-pocket expenses.”
How does this increase compare to inflation?
The private health insurance rise remains below the rise in wages and inflation which increased by 4.2 per cent and 4.1 per cent respectively in 2023.
Why does the government decide how much premiums increase by?
The Commonwealth is tasked with ensuring that the public and private sectors work side by side to provide high-quality healthcare for all Australians.
As well as assessing the average annual premium increase the Department of Health approved premium increases under the Private Health Insurance Act 2007.
Health insurers submit details of their proposed increases, demonstrating how costs have gone up and why their policies need the relevant increase.
According to the Commonwealth Ombudsman, the Health Minister must approve this before an insurer can apply an increase and pass it on to consumers.
– with additional reporting by AAP
