Australian Private Health Insurance Premiums Expected to Surge
Promises fall through
Health Minister Greg Hunt’s avowal to tackle private health insurance premiums has gone belly up after a sharp increase in the sales volume of medical devices. As a result, insurance holders are now warned that private health will undergo a substantial premium increase next year- with numbers expected to double the rate of current inflation.
2019 has seen the lowest insurance premium hike in 17 years- up by an industry-weighted average of 3.25%.
And while there have been connotations around the Health Ministry that 2020 will see an even lower premium increase of less than 3%, insurance companies are now up in arms because the lowered premiums were received on the premise that they would be saving through lowered medical device costs.
In an interview with ABC Radio Perth, Dr Rachel David, CEO of Private Healthcare Australia, talks about the direct link between rising premiums and inflated cost of prostheses in Australia. She states that prostheses and medical devices cost roughly about 4 times more than they should and that this expense accounts for about 14% of the total premium.
Data from the Australian Prudential Regulation Authority (APRA) showed a total prostheses payout of $2.08 billion by health funds in the last financial year- down $13 million from 2018.
There has been cost-cutting across the medical device industry, but the figures are showing something else entirely.
Private Healthcare Australia Chairman John Hill revealed that the APRA data showing the 8.6% hike in device sales sheds some questionable light on the industry, considering that hospital claims sit at 0.3%.
Allegations on the industry’s attempt to stay ahead of the new cost cuts through a new aggressive drive of sales techniques and a deliberate up-sell of ancillary devices, have been met with the reasoning that Australia simply needs more prostheses because of the aging population.
John Hill, Chairman of Private Healthcare Australia, said that insurers would have no other option but to carry those costs forward onto premiums.
Health funds have submitted their new April 2020 premiums for consideration to the Department of Health. The announcement on the new private health premium increase will be revealed by the Minister in late December.
Premium hikes have led to a mass dropping of health cover, particularly amongst younger Australians. As more young people are leaving the private health care sector, it leaves older people at risk of higher fees as they try to subsidise their costly health procedures.
If you want to avoid or reduce the price increase, Health Deal can help:
- We assess existing private health insurance policies, for the customer’s actual medical requirements. Our experienced agents recommend alternative policies, especially for medical services that you don’t need. For example, a 65-year-old woman may not need the coverage for pregnancy, and other maternity-related services. Health Deal can save you from being ‘over-covered.’
- We also compare policies with our health fund panel to identify the options that can reduce premiums. Health Deal will help you with options such as the choice of a shared room, private room, and choosing private health insurance companies that offer various services to suit the specific customer needs.
With our dedicated experts, we make sure that Australians find just the right private health insurance premium that gives them value for both money and cover.
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