Private health insurers warn of premium increases as Minns wins fee battle

Private health insurers have warned of a 2.5 per cent premium rise after losing a battle with the Minns government over hospital fees.

Private health insurers have warned of a 2.5 per cent premium rise after caving to pressure from the NSW government, agreeing to pay fees for patients who use private rooms in public hospitals.

The state’s three biggest private health insurers Medibank, Bupa and NIB have agreed to pay the almost $900 a day single room rate, after being the last to fight the Minns government over how much companies should pay when a ­customer gets a private hospital room.

Following months of negotiations, all 53 private health funds in NSW have now agreed to pay the rates from January 1 next year.

NSW Treasurer Daniel Mookhey has won the single bed rate stoush over private health insurers. Picture: Richard Dobson

The NSW government said the initial decision of the health funds to stop paying the room rate had robbed taxpayers of $140 million each year. As a result, the government passed legislation in October ramping up the Health Insurance Levy from $1.77 to $3.27 per adult. Treasurer Daniel Mookhey said insurers would only be required to pay the increased levy if they continued to refuse to pay the single room fees.

Should insurers refuse to pay the single room rates in the future, the levy can be activated at any time.

“Over months of negotiations, the NSW Government kept the door open to reaching a resolution with private health insurers,” Mr Mookhey said.

“We now have an agreement that’s good for our public hospitals and the millions of people who rely on them every day.”

Private Healthcare Australia CEO, Dr Rachel David, said the resolution was the “less harmful option” for consumers, but warned premiums would likely increase by as much as 2.5 per cent from April as a result.

Dr Rachel David, the CEO of Private Healthcare Australia, said the resolution was the ‘less harmful option’.

“NSW citizens are still likely to face an increase in health cover next year due to the NSW government’s decision to raise $140 million annually from privately insured patients who receive a single room in a public hospital,” she said.