Biggest hike in health premiums in five years
Source: Choice
Private health insurance premiums are set to rise by more than 3 per cent, in the biggest increase in five years.
The federal government has approved an average industry premium rise of 3.03 per cent.
It will come into effect from April.
This year’s increase is slightly higher than the rises of 2.9 per cent in 2023 and 2.7 per cent in 2022 and 2021.
It is the largest annual increase to health insurance premiums since 2019, which was 3.3 per cent.
Financial marketplace and advice company Compare Club said that with five big funds holding nearly 80 per cent of the market, the average increase for the majority of health insurance members was likely to be closer to 3.57 percent.
It said single policyholders could expect to pay an extra $96 a year on average, while families faced an average increase of about $181 and couples an average of $201.
Adding to the pain, it was also likely to be a second increase in six months for many policyholders as insurers played catch-up after the pandemic put premium rises out of sync for several years.
Health Minister Mark Butler said the average hike was below the annual rise in wages, which was 4.2 per cent in 2023.
“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.”
There were reports late last year that insurance providers had been chasing average hikes of up to 6 per cent.
This year’s approved increase comes after data emerged last week showing Australians have been squeezed by a 200 per cent hike in health insurance premiums over the past 20 years. Finder found health insurance costs have risen at more than twice the pace of broader inflation since 2000, with a policy once priced at $1000 now costing $3038.
Butler said the government had given $7.3 billion to policyholders through its private health insurance rebate.
It’s estimated more than $23.5 billion in health and medical benefits were paid out by private insurers in the past year.
“Private health insurers must ensure their members are getting value for money,” Butler said.
“When costs rise, Australians want to know that higher premiums are contributing to system-wide improvements like higher wages for nurses and other health workers and ensuring that affordable services are available.”
Compare Club research head Kate Browne said consumers could fight back by reviewing their coverage and shopping around.
“Being hit with the biggest increase since 2017 is adding more pressure to household budgets, after massive hikes in car and home insurance premiums,” she said.
“But the good news is there is a lot of competition for your business and there are several good deals on offer right now, including up to 12 weeks free. Swapping health insurers can take less than half an hour and can save you hundreds of dollars and get you more bang for your buck in terms of value.”
– with AAP
