Australia’s second biggest health fund delays premium rise for six months

Australia’s second biggest health fund has announced a further delay in its premium rise. See the reason why.

Exclusive: Australia’s second largest health fund has deferred its annual premium rise by six months until October as we can reveal the number of people using private insurance for surgery has plunged.

Health fund premium rises are meant to take effect on April 1 every year but most major health funds delayed their rise until July as their profits continued to surge in the wake of Covid.

Bupa on Monday announced a further delay in its premium rise until 1 October, saving its members a total of $154 million in premium freezes this year.

Bupa Health Insurance Managing Director Chris Carroll said Bupa recognised delaying premiums for six months was the right thing to do, particularly given ongoing financial pressures on household budgets.

Australian families have been impacted by challenging health and economic conditions in recent times,” Mr Carroll said.

“We’re saving our members $154 million at a time when they need it most, while ensuring they can still access all the benefits of their health insurance,” he said.

News Corp can reveal the real reason health funds are delaying their premium rises is that even though the number of health fund members has surged, the number using the product has slumped, pushing up insurers profits.

During Covid surgery bans implemented by state governments to free up hospital beds prevented many people having their surgery in a private hospital.

The number of people using private insurance for surgery has plunged. Picture: istock

Those bans ended ages ago but activity in private hospitals has still not got back to pre – Covid levels.

Health funds paid out for 247,015 fewer surgeries in 2022 than they did in 2021 when surgery bans were in effect.

And the number of hospital visits covered by insurers is 201,479 visits lower in 2022 than it was before the pandemic in 2019.

Data released late last week shows a record 14.42 million Australians (55 per cent of the population) now have private health insurance.

Health fund membership grew by 2 per cent in 2022, with an additional 250,000 persons taking out private hospital cover

People are flocking to take out cover to avoid surging public hospital waiting lists.

The Australian Medical Association has predicted the number of people waiting for elective surgery in public hospitals is expected to reach more than 500,000 by 30 June.

AMA Professor Steve Robson has described this as a “horror figure” and warned access to timely elective surgery is out of reach for many Australians”.

The Australian Private Hospitals Association (APHA) said the main reason private hospitals have not been able to return to full capacity is a shortage of 8,000 nurses.

Private hospitals are urging the government to speed up skilled migration to solve the problem APHA chief Michael Roff said.

BUPA managing director Chris Carroll.

Private Healthcare Australia CEO Dr Rachel David who represents health insurers said people were having trouble affording a visit to a general practitioner and were waiting longer to see one as bulk billing declined.

This meant they were taking longer to get the referral they needed to see a specialist and they couldn’t be listed for surgery until this happened.

“Some medical practitioners may have decided to work less as a consequence of Covid lockdowns and they’re putting up their charges to cover their costs,” she said.

People who were listed for surgery before Covid surgery bans took effect did not all come back later to have their treatment and the industry is investigating whether these people got better or may have passed away, she said.

This premium freeze is part of Bupa’s Covid-19 related savings being returned to customers and to help provide some financial reprieve from the increased cost of living, Mr Carroll said.

Since the Covid-19 pandemic started BUPA has handed back almost $1 billion ($954 million) to its members through cashbacks, premium deferrals, and financial assistance for impacted customers and other support programs.