This will be the lowest annual rise in health premiums in 17 years, with families and singles on average expected to pay an extra $2.75 and $1.40 per week respectively.
Minister Hunt said the lower rise in premiums comes following the Government’s reforms to take the pressure off private health insurance.
“We know that every dollar matters to Australian families and although this is the lowest increase in 17 years, there is more work to be done,” he said.
“More than 13 million Australians have private health insurance and it is vital that cover is affordable and provides value for money.”
Canstar Group Manager of Research and Ratings Mitch Watson said with health cost inflation up 2.7% year on year to September 2017, a premium rise was inevitable.
“The degree of the increase will be more palatable to the 13.4 million Australians who hold health insurance in comparison to previous years,” Mr Watson said.
|Average Health Insurance Premium Increases Since 2010|
|Source: Department of Health|
Mr Watson said that while the average increase will be 3.95%, consumers could experience increases between 2.28% and 8.90%, depending on which health fund they are with.
“This is generally a time of year where people will be looking to see whether they are still receiving good value from their health insurance and deciding to either stay, change their insurer or cancel their insurance,” he said.
Minister Hunt said the reforms announced in October last year have made an impact and will continue to drive down costs.
“Every single dollar of savings from the $1.1 billion reform of the Prostheses List is being passed onto consumers and this has already resulted in this lower premium change this year,” Minister Hunt said.
“To be clear – this reform alone will deliver savings of $1.1 billion to Australians with private health insurance. We are also investing around $6.4 billion every year in the private health insurance rebate to help keep premiums affordable.”
Mr Watson said any change in rebates following the premium rise announcement will provide more clarity on what the true impact of the premium rise will be.
“With inflation lower than the premium increases a reduction in the amount of the government rebate will be experienced by Australian policyholders increasing their premiums above the premium changes announced,” he said.
Health funds confirm premium rises
HCF and Medibank have confirmed average premium increases for 1 April of 3.39% and 3.88% respectively.
Medibank, whose average increase includes its ahm health insurance products, said its below average rise was a result of the work it had done to “remove waste” and the recent reforms.
HCF Chief Executive Officer Sheena Jack said HCF’s premium rise is the lowest of the major funds.
“This is great news for consumers and particularly our members. We know affordability is a major concern and we’re pleased that we have been able to provide some relief in the level of increase for our members,” Ms Jack said.
Average premium rise by each health fund
|Insurer||1 April 2018 average premium increase (with rate protection)|
|ACA Health Benefits Fund Limited||2.72%|
|Australian Unity Health Limited||3.89%|
|BUPA HI Pty Ltd||3.99%|
|CBHS Corporate Health Pty Ltd||2.38%|
|CBHS Health Fund Limited||2.73%|
|Cessnock District Health Benefits Fund Limited||6.40%|
|CUA Health Limited||3.29%|
|Defence Health Limited||5.97%|
|Doctors’ Health Fund Pty Ltd, The||2.28%|
|Emergency Services Health Pty Ltd||3.36%|
|Grand United Corporate Health Limited||2.84%|
|HBF Health Limited||3.75%|
|Health Care Insurance Ltd||8.90%|
|Health Insurance Fund of Australia Limited||5.35%|
|Health Partners Limited||3.95%|
|health.com.au Pty Ltd||5.87%|
|Hospitals Contribution Fund of Australia Ltd, The||3.39%|
|Latrobe Health Services Limited||4.25%|
|Medibank Private Limited||3.88%|
|Mildura District Hospital Fund Ltd||5.68%|
|MO Health Pty Ltd||3.90%|
|National Health Benefits Australia Pty Ltd||3.97%|
|Navy Health Ltd||3.94%|
|NIB Health Funds Ltd||3.93%|
|Nurses & Midwives Health Pty Ltd||3.22%|
|Peoplecare Health Limited||4.19%|
|Phoenix Health Fund Limited||4.19%|
|Police Health Limited||3.72%|
|Queensland Country Health Fund Ltd||4.39%|
|Queensland Teachers’ Union Health Fund Limited||4.40%|
|Railway & Transport Health Fund Ltd||4.47%|
|Reserve Bank Health Society Ltd||3.97%|
|St Luke’s Medical and Hospital Benefits Association||4.23%|
|Teachers Federation Health Ltd||2.84%|
|Transport Health Pty Ltd||5.16%|
|INDUSTRY WEIGHTED AVERAGE||3.95%|
Source: Department of Health
“A massive fail”: Labor
Shadow Minister for Health Catherine King said a slightly lower increase this year doesn’t undo the impact from previous health premium rises under the Turnbull government.
“After this latest hike, premiums will have increased by an average of 27% under the Liberals,” Ms King said.
“This comes off the back of the major insurers’ share price receiving a bump after Turnbull’s so called ‘reform package’ last year and an industry that last year made before tax profits of $1.8 billion.”
Ms King said this year’s rise will see young singles paying an extra $75 per year for health insurance while mature couples and families with obstetrics will pay an extra $179-$181.