South Australians paid $249 million more for private health insurance than they got back in benefits in 2016/17

SOUTH Australians with private health insurance paid $249 million more in premiums than they got back in benefits during 2016/17.

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SOUTH Australians with private health insurance paid $249 million more in premiums than they got back in benefits during 2016/17.

Private health funds charged SA residents $1.75 billion for hospital and extras insurance and paid out $1.5 billion in benefits, according to figures Labor is using to push for a two per cent cap on premium increases.

The difference between premiums and benefits was about $243 per person, an Opposition analysis of Australian Prudential Regulation Authority statistics shows.

Labor health spokeswoman Catherine King said the figures helped make the case for Labor’s plan to limit annual premium increases to two per cent for two years if it wins the next federal election.

“This is just more evidence of the need to act to make private health insurance fairer for Australians,’’ Ms King said.

“Australians are paying more than ever for private health insurance, and still being stung when they try to use their cover.”

Ms King said the Labor plan would save families about $340 per year.

Private Healthcare Australia chief executive Rachel David said Australian health funds paid about 86 per cent of their revenue from premiums back to members as benefits.

“It really hasn’t shifted, they’re paying out 86 cents in the dollars and that’s the same in South Australia,’’ Dr David said. “To compare that to other insurance businesses, if you look at general insurance, it’s 62 cents in the dollar ... and for other forms of insurance such as travel it’s even lower.’’

Dr David said capping premium increases could push some small not-for-profit health funds “to the wall”.

A spokesman for Health Minister Greg Hunt, pictured, said Labor’s policies would drive up the price of health insurance and out-of-pocket costs for patients.

“Labor are becoming increasingly bizarre — not only did they slash the rebate and have massive premium increases when they were in government, now they are proposing to slash the rebate again, push up premiums by 16 per cent and increase out-of-pocket costs,’’ the spokesman said.

Private health insurance premiums will increase by about 3.95 per cent in April. Mr Hunt’s spokesman said the increase would be the lowest in 17 years because of reforms the Government had introduced.

The Government last year announced a range of reforms to make private health insurance cheaper and more attractive, including allowing funds to provide discounts to members aged in the teens and twenties. The private health insurance industry includes a mixture of not-for-profit funds and funds which pay dividends.

Dr David said addressing the cost of some medical devices and providing more services out of hospital could help take pressure off premiums.