Private health premiums are set to rise 3.73% from the beginning of April after insurers were asked to rethink hikes.
Minister for Health and Aged Care Mark Butler agreed the increase was proportionate, after previously asking private health insurers to resubmit their claims three times.
The increase is below current inflation rates, but above household inflation rates, meaning many consumers will still feel the pinch.
Around 15 million Australians hold private health insurance cover, with a total of $29.9 billion paid in premiums in the 12 months to 30 September 2024.
Private Healthcare Australia chief executive Rachel David said the increase was necessary for private health funds to meet rising costs.
“Every premium increase is carefully calculated and regulated. We know people with health insurance are impacted by cost-of-living pressures, so health funds are doing everything possible to ensure health insurance remains affordable and accessible for Australians,” Dr David said.
“Health funds have gone back to regulators three or more times this year to reach the lowest increase possible. But to remain viable, funds have to charge more because inflation is driving up the cost of everything health insurers pay for.”
RELATED: Basic hospital cover could cost more in the long run
Last year health insurance rose 3.03%. PHA said medical and hospital services were the main contributor to price rises this year.
Health funds paid $18.73 billion for hospital claims last year, an 8% increase compared to the year before, the industry body said in a statement.
“We know Australians are doing it tough and that many of our members are not wealthy, 40% have a taxable income of $50,000 per year or less and 10% of these people are on the aged pension as their only income,” Dr David added.
“These people are choosing to contribute to the cost of their own health care, which in turn takes pressure off our stretched public hospitals.
“Health funds will continue doing everything possible to avoid driving up members’ health insurance bills unnecessarily, while still providing value for money.”
RELATED: Young uptake on health insurance
Meanwhile, new data from the Australian Prudential Regulation Authority show in the last quarter of 2024 a total of 59,000 Australians purchased private health insurance with hospital cover and 63,000 purchased general treatment insurance to access more affordable allied healthcare such as dental, physiotherapy and optical services.
In Western Australia some 1.6 million – 54.4% – of the population had health insurance with hospital cover, just shy of the national average of 54.9%.
For each insured individual with hospital coverage, the average hospital benefit payment by health insurers increased by 5.4% over the year to December 2024, from $1,433 to $1,510, the data showed.
Dr David said the data also highlighted a worrying rise in out-out-of-pocket costs being charged by doctors and some hospitals without health fund contracts in 2024.
RELATED: Specialists accused of fraud
“The average out-of-pocket fee charged for hospital treatment jumped 7% from $410 to $439 in 2024,” she said.
“And the average ‘gap fee’ being charged by specialist doctors is now $276 with variation among different types of doctors. Orthopaedic surgeons are charging the highest fees, hitting patients with an average $730 bill.”
Want more news, clinicals, features and guest columns delivered straight to you? Subscribe for free to WA’s only independent magazine for medical practitioners.
Want to submit an article? Email editor@mforum.com.au