Health insurance premiums to cut more from hip pockets
Australians are being urged to review their health insurance coverage as premium increases come into force.
The cost of premiums will rise an average of 4.41 percent on Wednesday, the largest price increase since a 4.84 percent increase in 2017.
The federal government approved the increase in February after the cost of medical and hospital services rose five percent last fiscal year.
Private Healthcare Australia general manager Rachel David said people relied on private hospitals at all stages of life, including neonatal intensive care for newborns, mental health treatment for young adults and joint replacements to help older Australians remain independent.
Dr David said the structure of the gold, silver, bronze and basic tier system introduced by the Morrison government in 2019 to make health insurance easier to understand had contributed to affordability pressures.
Gold policy premiums of the five largest funds will increase by 13.3 percent on average consumer group CHOICEThose with silver, bronze and basic policies face an increase from 2.6 percent to 3.3 percent.
Dr David said the high increases on some gold policies reflected the fact that these products cover the most complex and costly medical treatments, including inpatient mental health care, weight loss surgery, reproductive services, pregnancy and childbirth.
“Gold policies have now become a catch-all for a very wide range of treatments, most of which are used by a relatively small group of members,” he said.
“This makes these policies more expensive for insurers and consumers and less sustainable over time,” he said.
“In summary, gold hospital cover is now predominantly used by a group of people who know they will be making claims for high-cost services, which leads to quite a bit of inflation.”
Private Health Australia is calling for a review of the tiered framework that would allow insurers to design products better adapted to different life stages and health needs, spreading the risk of high-cost care across a wider population.
Dr David said meanwhile, consumers concerned about affordability could consider whether they needed a gold cover or whether a silver or bronze product would suit their own life stage better.
They may also adjust their excess to reduce premiums and review extra coverage to remove services they are unlikely to use.
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