The Government realises that cost of living pressures are a major concern for Australian families and is determined that more can be done to get better value for families. Private health insurance provides an important service to 13.5 million Australians and the Government is taking actions to help reduce price increases.
From 1 April 2017, the industry average weighted private health insurance premium increase was 4.84 per cent. This was the lowest increase in ten years.
While premiums have increased, the amount of hospital benefits paid out by private health insurers has increased on average, 5.4 per cent over the last financial year. This means that Australians have claimed more on their private health insurance than ever before.
There are a number of issues that impact upon private health insurance costs, and these include:
- higher costs of treatment and services;
- increasing utilisation of privately insured services;
- an ageing membership; and
- an increase in the chronic and complex conditions of members.
In recognition of the importance of taking the pressure off the public health system, the Government will continue to support affordable health insurance via its private health insurance rebate, currently worth around $6 billion per year. On 20 February 2017, the Government also reduced the costs of prostheses by an estimated $86 million in the first year and close to $500 million over six years from 2017-18 to 2022-23 to help take pressure off private health insurance premium increases.
There are 37 private health insurance insurers currently operating in Australia and consumers are encouraged to shop around to get the best deal for themselves and their families. Independent, commission free advice on private health insurance is available on the Private Health Insurance Ombudsman
website. In addition, consumers are able to view detailed pricing of all the private health insurance policies available in Australia.
The Government is aware that many consumers are concerned by the complexity and value of their private health insurance. In response, on 8 September 2016, the Private Health Ministerial Advisory Committee
chaired by Dr Jeffrey Harmer AO, was established and is tasked with advising Minister Hunt on potential reforms that could simplify and deliver better value to consumers who purchase private health insurance.