Medibank, the largest insurer, will lift premiums by 3.31 per cent, while Bupa, the second-largest, will increase them by 3.61 per cent. Fees for HCF customers will increase by 2.89 per cent, and HBF policyholders will pay 3.95 per cent more.
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Rachel David, the chief executive of peak body Private Healthcare Australia, said there had been a 10 per cent jump in insurance payments for claims in the past year, while health inflation had risen to 5.1 per cent.
“Our strong private system is taking pressure off the public system, so public hospitals are free for those who need them most. Health funds are now paying for two-thirds of all elective surgical procedures in Australia,” she said.
“But in the current economy, it is becoming more challenging to keep private hospital care sustainable without increasing premiums.”
The average premium increase has hovered below 3 per cent since 2020, as customers made fewer claims while elective surgery was paused during the COVID-19 pandemic, and some insurers deferred increases as part of their promise not to profit from the pandemic.
But the average increase for the decade between 2014 and 2023 was 4.4 per cent, with increases above 6 per cent in 2014 and 2015.
The 3.03 per cent average is also lower than insurers’ original request, which would have lifted premiums by 6 per cent on average. Butler knocked that back in December and asked them to go back to the drawing board, citing concern for household budgets.
“While we know that any increase will be hard to bear during a global cost-of-living crunch, the Albanese government has ensured that health insurance premiums will fall relative to Australians’ wages,” he said.
“Private health insurers must ensure their members are getting value for money. When costs rise, Australians want to know that higher premiums are contributing to system-wide improvements, such as higher wages for nurses and other health workers, and ensuring that affordable services are available.”
Coalition health spokesperson Anne Ruston accused the government of keeping the news from Australians until after the Dunkley byelection, which Labor won last weekend.
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Private health insurance memberships have risen for 13 consecutive quarters, despite cost-of-living pressures, to their highest rate in five years. Insurers have suggested that declining confidence in the public health system and demographic factors are driving the uptake.
Just over 45 per cent of Australians had hospital insurance in the September quarter and 55 per cent had general cover for extras like dental, optical and physiotherapy. But customers are also facing rising out-of-pocket payments for common medical procedures, with some procedures increasing in cost by as much as 300 per cent in five years.