Christmas has come a week early for Australians with private health insurance, with the Federal Government announcing a premium increase of 3.25 percent for 2019.
Federal Health Minister Greg Hunt announced the increase ahead of schedule, the smallest change since 2001 which will take effect from Monday 1 April 2019.
Mr Hunt said the premium increase would be one of a number of changes introduced in 2019, including changes in private health insurance categories.
“Every dollar matters for families and we will continue to improve the affordability and transparency of private health insurance.
“New Gold, Silver, Bronze and Basic product tiers will be introduced for hospital insurance products from early 2019.
“These reforms will make private health insurance simpler and more affordable and make it clearer on what is and isn’t covered in their policies,” he said.
Australian Private Hospitals Association (APHA) CEO Mr Michael Roff welcomed government efforts to keep private health insurance affordable.
“Australians who use private hospitals recognise the high quality of care they receive, and want to maintain their health insurance to ensure their access to care. Australians clearly value their private hospitals, the latest Australian Prudential Regulation Authority data showed an increase in episodes of care in private hospitals, which has been steadily increasing since the early 2000s, despite drops in participation in insurance.
“I am hopeful that the government’s reforms will make comparing private health insurance policies easier so consumers have a better understanding of the insurance and what they are covered for,’ he said.
"The next step in improving the value proposition of private health insurance is to address out-of-pocket medical costs, which often take consumers by surprise."
The low premium increase was also welcomed by Private Healthcare Australia CEO Rachel David.
“No-one likes a premium increase, but it is necessary to ensure health funds remain financially viable, meet statutory prudential requirements and most importantly, continue to be in a position to provide members with access to quality healthcare,” she argued.
Consumer Health Forum CEO Leanne Wells said while it was good to see a low premium increase more needed to be done on out-of-pocket costs.
“Out-of-pocket health costs in Australia now amount to more than $30 billion and many of those costs are borne by families who have already paid more than $5000 a year or more in health insurance premiums,” she said.
But Shadow Health Minister Catherine King was less impressed. She said the above inflation hike would be a major hit to the family budget and force more people to abandon their cover.
“Already, Australians are downgrading or ditching their private health cover in record numbers in response to relentless price rises, soaring out-of-pocket costs and growing exclusions.”