Health Fund premiums will still rise by more than inflation

HEALTH insurance funds have just been handed $1 billion in savings but say next years premium rise may still be above the inflation rate.

Health fund premium rises will still be above inflation Picture: iStock

HEALTH funds are refusing to guarantee that premium rises will not soar higher than inflation despite winning over $1 billion in savings under health reforms.

And health fund groups claim the reforms will shave just $34 from an expected $200 a year premium hike next year.

The government is also facing a major backlash over its decision to end health fund subsidies for natural therapies with a social media protest over the move read by over 70,000 people.

The Your Health Your Choice campaign led by natural therapy practitioners says it’s ridiculous that at the same time it is discounting premiums to attract young people into insurance the government is axing subsidies for the very treatments they want to use.

In other developments insurers have revealed that unless health funds get an extra 50,000 young members as a result of a new 10 per cent price discount older health fund members will have to pay higher premiums to cover the cost of the incentives.

And while health funds have won the right to keep offering public hospital only insurance policies they are actively campaigning to stop paying for treatment in public hospitals.

More than 560,000 Australians have these so called “junk policies” that only cover them in a public hospital even though they can get free public hospital treatment under Medicare.

The government reneged on its election promise to axe these “junk” policies but health funds now want their members barred from using them in public hospitals unless the fund is given 24 hours notice.

“It’s ludicrous. You can’t on the one hand say the states can’t ask patients if they want to use their private insurance in public hospitals and on the other hand say taxpayers must subsidise junk policies that only allow you to use insurance in a public hospital,” Australian Healthcare and Hospitals Association chief Alison Verhoeven said.

Private Healthcare Australia chief Rachel David says there has been a 12 per cent growth in people using private insurance in public hospitals as public hospitals aggressively pursue health fund members, “all we are saying is we want a proper process”.

“If the intent of the private health insurance rebate is to take pressure off private hospitals, then there is no policy justification for applying the rebate to junk policies,” Australian Private Hospitals Association chief Michael Roff said.

Meanwhile health fund chiefs were yesterday unable to guarantee that health fund premium rises next April will be lower than the 4.84 per cent average rise this year in the wake of the reforms.

Private Healthcare Australia has estimated that the $181 million cuts to the prices funds pay for medical devices like hip and knee replacements should shave 1 per cent off the next year’s premium rises.

Medibank CEO Craig Drummond refused to guarantee premium rises would therefore be 3.9 per cent next year compared to 4.84 per cent this year as a result of cuts to prostheses prices.

“Medibank will pass 100 per cent of those savings onto customers in the form of lower premiums, as we did in 2017,” he said.

BUPA chief Dwayne Crombie also questioned the 3.9 per cent figure claiming it was “maybe a bit of a stretch given the way claims are behaving and the sorts of changes we are seeing in the sector”.

NIB said it could not guarantee what it’s price rise application would be for next year but a spokesman said it would take into account the savings.

Health Minister Greg Hunt however was promising his reforms would take “hundreds of dollars out of the costs” that people would otherwise be paying.

The Medical Technology Asociation Australia said insurers must commit to price rises no higher than inflation.

“This is an industry that already gets $6 billion in taxpayer subsidies every year, has increased profits by more than 17 per cent last year and has consistently increased prices above inflation every year. Premiums have risen by 55 per cent since 2009,” the association said.