Health premiums to rise, will cost Australians up to $174 more to stay covered

Health Minister Greg Hunt has approved a second health premium rise in just six months. This is how it will affect you and your family.

Health fund members will be slugged with their second premium rise in six months.

From April next year will have to pay up to $174 more per year to stay covered.

Health Minister Greg Hunt has approved the 2.74 per cent average rise which he said was the lowest since 2001.

But for many health fund members it will be the second hike in six months coming hot on the heels of October’s premium rise which averaged 2.92 per cent.

Health funds delayed their April premium rises last year because of the COVID-19 surgery ban which saved them nearly $1 billion.

The number of people using their extras cover also plunged to just 25 per cent of the usual rate the week commencing April 6 due to the COVID-19 lockdown.

Surgery rates and extras use picked up once the lockdown ended and the delayed premium rises went ahead for most fund members on October 1.

However, some members, particularly those with Gold and Silver policies, faced premium rises of up to twice the average announced by the government.

In October the nation’s largest health fund Medibank hiked the price of some of its Gold policies by 6.7 per cent and many Silver Plus policies by 5.9 per cent.

Bupa, Australia’s second largest insurer increased the cost of one Silver policy by 5.6 per cent in October.

Bupa is increasing costs as are others. Picture: Supplied

News Corp has revealed the so called “average” 2.74 per cent premium rise figure – used by the government — is misleading.

It is not an average of the premium rises of the policies offered by funds but instead the percentage rise in premium income health funds receive.

Announcing the rise Mr Hunt said the 2.74 per cent average industry change from 1 April 2021 was “the lowest change in 20 years”

It was “over 50 per cent lower than premium rises under the previous Labor Government,” Mr Hunt said.

And he pledged further reforms to health insurance from next year.

Under changes to take effect next year people who remain dependent on their parents can remain covered under family policies until they reach the age of 31.

Federal Health Minister Greg Hunt. Picture: NCA NewsWire / David Geraghty

People with a disability who remain dependent on their parents will remain covered by their insurance regardless of age, Mr Hunt said.

The government will also for the first time allow health funds to cover some at home and community based care, beginning with mental health and general orthopaedic rehabilitation services.

Private Healthcare Australia chief Dr Rachel David said “health funds don’t want to increase premiums by a single dollar”.

Premiums had to rise to ensure health funds remained financially viable, meet statutory prudential requirements and most importantly, continue to be in a position to provide members with access to quality and timely healthcare, she said.

“The only reason premiums go up at all is because health funds are paying for more healthcare,” she said.

The industry wants government reforms to go further and they are demanding the health fund rebate by lifted back up to 30 per cent, it has fallen to 25 per cent of premiums as a result of government cut backs.

The funds want red tape cut so they can cover more treatments outside the hospital, particularly in mental health care.

Surgery costs for different procedures will change.

They also want inflated medical device prices cut to lower the cost of hip and knee surgery.

The premium announcement came as BUPA notified its members of changes to the way they could claim for dental benefits.

From February next year BUPA members can claim only one dental diagnostic screen per year, one panoramic x-ray every two years, one mouthguard per year and the fund will no longer pay for adjustments to dental braces.

The fund said the changes “could affect the way you’re able to claim benefits for a small number of dental services. These won’t affect your level of cover.

Opposition health spokesman Chris Bowen said the announcement brought total premium rises under the Coalition to 36 per cent, and follows the ACCC’s recent finding that insurers have paid out $500 million less in benefits due to COVID-19.

“With premiums soaring and benefits falling, it’s no wonder that health insurance coverage is already at its lowest level in decades – and today’s announcement will only add to the pressure,” he said.

He said Mr Hunt must now urgently justify his Christmas ‘present’ to Australian families.

“The Private Health Insurance Act gives the Minister the power to reject premium increases that “would be contrary to the public interest,” he said.

The Minister must explain why another 2.74 per cent average increase next year is in the public interest – or cancel it altogether,” he said.

Originally published as Health premiums to rise, will cost Australians up to $174 more to stay covered