Cost of private health insurance tipped to rise

STRUGGLING families are facing another rise in the cost of health insurance as the Federal Government considers whacking customers with even higher premiums.

Health insurers, demanding an increase that will cost some customers an extra $200 a year, are lobbying the Government to allow them to pass on their medical inflation costs.

But major health funds, acknowledging the public’s intolerance for and inability to pay too many increases, have taken a swipe at the Government, saying Health Minister Sussan Ley could almost immediately save customers $800 million if she dramatically reduced how much insurers paid for internal medical devices.

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Townsville parents Drew and Amanda Walker say a health insurance price rise would make them reconsider their membership.

The Government sets the price for what health insurers pay for devices such as prostheses, but no such price is set in the public system, which means internal devices are much cheaper there.

Australian taxpayers aged over 30 who refuse or drop out of private health insurance are taxed at a higher rate, leaving many households in a catch-22.

Private Healthcare Australia CEO Rachel David said health funds would submit individual applications for premium increases to Government based on their expected claims for the next 12 months.

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Health Minister Sussan Ley says the Government is committed to boosting value for money for those with health insurance. Picture: AAP

“Key components of health inflation are beyond the control of health funds,’’ Dr David said.

Nib CEO Mark Fitzgibbon said it had until November to lodge its premium review application.

“We (the health industry) are pushing so hard for prostheses pricing reform,” he said.

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Private Healthcare Australia CEO Rachel David says key components of health inflation are beyond the health funds’ control. Picture: Hilary Wardhaugh Photography

“Consumers stand to benefit by as much as $800 million a year, which translates into premium savings of up to 4 per cent, and there will be no impact on the high quality of care consumers rightfully expect in the private system.”

A Bupa spokeswoman said Australians paid the highest price in the world for prostheses. She said the international reference price for a specialist orthopedic plate was $92, while in Australia we pay $1060.

Ms Ley said the Government was committed to improving value for money for those with health insurance.

“Reviewing the way prostheses are priced is just one element of the Turnbull Government’s broader package of private health insurance reform, which is aimed at increasing affordability and value for money for Australians,” she said.

Townsville parents Drew and Amanda Walker said a health insurance price rise would make them reconsider their membership.

“It would be something to think about,” Mr Walker said, “but you can’t risk it with a new bub, especially.

“It is an expensive but necessary evil.”