Private health insurance premiums go up again
While the latest 3% rise is less than inflation, it’s time for a systematic inquiry to determine if we are getting value for money.
The Federal Government has approved an average industry premium increase of more than 3%, to take effect from 1 April this year.
It will be the largest annual increase in private health costs since 2019, but modest by historical standards and lower than inflation.
It follows a 2023 increase of 2.9% and a 2022 increase of 2.7%, but some funds will have bigger price hikes than others. The big players, Medibank, Bupa, NIB, and HBF, will have higher-than-average increase.
Only six health insurers have kept their average rise to below 2%. They are Australian Unity, Defence Health, Health Care Insurance Ltd, Health Partners, Peoplecare Health, and Queensland Teachers Union.
Each insurer’s average change is displayed here on the Department of Health and Aged Care website.
While the 2024 increase is the largest in five years, it’s just over half of the 6% increase health funds initially asked for.
Nearly 15 million Australians – or 55% of the population – have hospital or extras cover. Private health customers received more than $23.5 billion in health benefits in 2023, according to the Health Department.
The Australian Government will provide $7.3 billion this year to policyholders through the private health insurance rebate.
One way to delay the 2024 price increase, if you’re able to do so, is to prepay for 12 months before your fund increases the price.
National Seniors Australia’s most recent social survey asked respondents a series of questions about private health insurance. The results will be used to develop a research report which will be published in late April or early May.
The results reinforce the importance of private health insurance among National Seniors members and supporters (and older people more generally), with only 19% saying they did not hold private health insurance in some form.
Thank you to everyone who participated in the survey. Your responses, and our future report, will help us to advocate for a better private health care system.
In its federal budget submission, National Seniors Australia recommends that private insurance, and the private health system more broadly, be reviewed by the Productivity Commission to ensure older policy holders are getting value for money.
That was actually a 2018 Labor policy, but we haven’t heard anything since the party won government in 2022.
You have told us the cost-of-living pressures are biting, especially private health insurance and out-of-pocket health costs.
In fact, our recent survey of 6,500 older people found the issue of private health was the second most important concern behind cost-of-living more generally.
We believe only a whole-of-system analysis and redesign will address the full range of problems facing policy holders.
Private health cover among older Australians from the recent National Seniors Social Survey.
The Productivity Commission (through its precursor, the Industry Commission) last undertook a full review of private health insurance in 1998. Other reviews include:
The ACCC’s annual reports to the Australian Senate over 25 years, analysing key competition and consumer developments and trends in the private health insurance industry that may have affected consumers’ health cover and out-of-pocket expenses
Reports of the Private Health Insurance Ombudsman
The Private Health Ministerial Advisory Committee (2016 – 2018), charged with reviewing all aspects of private health insurance and providing advice to government on reform.
Despite these and other measures of the Health Department and the Australian Prudential Regulation Authority, policy holders continue to face a never-ending cycle of premium increases, product limitations, and soaring out-of-pocket costs.
With private health insurance and out-of-pocket health costs rising, it’s more important than ever that the private health system is reviewed from top to bottom to ensure policy holders are getting value for money.
That’s why National Seniors is calling on the Federal Government to fund an in-depth inquiry into the private health insurance system with a particular focus on the:
Growth of private health insurance premiums and out-of-pocket expenses
Value and scope of product offerings covered by private health insurance
Reforms needed to minimise premiums and out-of-pocket costs.
A systemic review would be a precursor to a redesign of the private health care system to ensure it has fit-for-purpose policy settings.
Related reading: Minister’s statement, NSA recommendations
