Private health insurers profited $900m off the coronavirus pandemic
The pandemic has proven profitable for private health insurers, with most increasing premiums despite paying for less procedures.
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Health funds pocketed a whopping $900 million as a result of COVID-19, official government data shows.
Despite making these massive savings most funds still went ahead with premium rises on October 1.
Health funds paid for around 300,000 fewer hospital procedures saving funds $507 million, the data from the Australian Prudential Regulation Authority shows.
They also paid out for 10 million fewer extras services including dental and physiotherapy saving $398 million.
More people are having surgery and visiting dentists after the COVID surgery bans were lifted in June, but the amount health funds paid out this year is still 6.6 per cent lower than the same time last year.
The latest official statistics show health fund membership is continuing to decline with just 43.8 per cent of the population covered in September 2020, down from a peak of over 47 per cent in 2014.
However more older people are joining health funds which is likely to fuel the death spiral in the industry by further driving up premiums as they are more likely to claim on their insurance.
Younger people are continuing to shun the high cost product even though there are multiple government tax slugs and age-related penalties to force them to join up.
An extra 70,589 people aged over the age of 50 joined health funds in the year to September.
This compares to only 11,760 35-39 year olds who took out health insurance.
Despite making considerable savings from lower surgery rates health fund profits after tax were down an eye watering 49.5 per cent, the data shows.
Health funds offered deals to help people who lost income or jobs during the coronavirus crisis remain covered.
Many offered to extend their policies to cover coronavirus related health care.
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Originally published as Private health insurers profited $900m off the coronavirus pandemic
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