Families will pay up to $200 a year more for private health insurance after the Federal Government approved a premiums rise of almost 5%.
Premiums will rise by an average 4.84% from 1 April 2017, the Government has announced.
Health Minister Greg Hunt says the rate hike is the smallest in 10 years and will cost families about $4 a week on average. He says singles will pay an average $2 a week more for their cover.
More than 13 million Australians have some form of private health insurance.
Managing Director of Bupa Health Insurance Dr Dwayne Crombie says premium increases are being driven by factors such as an ageing population, new and more expensive medical technology, rising consumer expectations and reduced government rebates. Bupa says it will raise average health insurance premiums by 4.9 per cent, a little above the industry average.
HCF, Australia’s leading not-for-profit private health fund, has announced a 3.65% premium increase, the lowest amongst the major insurers.
HCF Managing Director Shaun Larkin says health care costs have increased above CPI for a number of years and the Federal Government rebate on private health insurance has been steadily eroded.
“Since 2011, the cost of hospital, medical and prosthesis benefit payments have increased by more than 50 per cent,” Larkin says. “The premium rate increase is also partly driven by the continued erosion of the rebate.”
In 2013/14, the Government rebate for people in the lowest income bracket was 30 per cent. It’s gradually been reduced since and now, in 2017/18, it will be reduced to 25.9 per cent.
The rebate, which costs the Federal Government about $6 billion a year and is designed to help individuals meet the costs of private health care, will decrease again from 1 April.
Minister Hunt says there are 34 private health insurance funds operating in Australia and customers should shop around to get the best deal for themselves and their families.