The Australian Prudential Regulation Authority (APRA) has released its quarterly private health insurance publications for the June 2016 quarter, finding that health insurance profit is up, to $1.2 billion for the year ending June 2016 (net profit after tax).
|June 2015||June 2016||Change|
|Premium revenue||$20.7 billion||$22.1 billion||+6.4%|
|Fund benefits||$17.9 billion||$18.8 billion||+5.3%|
|Net profit after tax||$1.1 billion||$1.2 billion||+8.9%|
|Total assets||$11.8 billion||$12.8 billion||+8.3%|
Source: APRA Quarterly private health statistics to June 2016
News that private health insurance profits are up did not go down well with everyone, with the Consumers Health Forum of Australia labelling it “time for change.”
“These results underline the need for a searching review of the state of health insurance,” the CEO of the Consumers Health Forum, Leanne Wells said.
“We need the Government to move ahead with its planned review as soon as possible. We do not want another round of high premium rises early next year for health cover that is not only very costly but often confusing and uncertain.
“Government subsidy has been provided to health funds with the aim of putting private health cover in reach of average Australians. Do we now have a situation where publicly listed funds are putting profits ahead of patients?”
“Health funds pay back 86 cents in the dollar”
The CEO of Private Healthcare Australia, Dr Rachel David, said Australian Health Funds are committed to keeping private health insurance sustainable and premiums affordable for members. The fact that funds are operating as successful businesses demonstrates that the future of the industry looks healthy and secure.
“Unfortunately claims todays from the Consumer Health Forum regarding PHI premiums and benefits are misleading and do not take account of volatile claiming patterns”, said Dr David.
“Health funds are consistently paying out the highest percentage of the premium back to customers of all insurance types – an average of 86c in the dollar. This compares with 67c for property insurance and 62c for general insurance.
“The 12 month premium cycle is legislated, even if it were appropriate, health funds cannot adjust premiums to account for windfall gains outside of this cycle.”
Approximately 47% of Australians have private hospital cover and 55% have extras cover.