Private health insurance premiums are scheduled for October, Medibank boss says
Private health insurance members could endure two premium rises within a six-month time frame despite having restricted access to services.
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Private health insurance members could endure two premium hikes within a six-month time frame, despite having restricted access to services.
Medibank chief executive officer Craig Drummond today confirmed there had been no cuts to staff salaries during the pandemic, unlike many other industries that had seen temporary wage cuts.
“There’s hasn’t been any cuts in salaries although what we did say with our half-year results is that any bonuses will be noticeably lower this year,” he told News Corp.
The annual private health premium hikes which occur on April 1 each year have been paused in 2020 until October 1 due to COVID-19.
Mr Drummond said it was unclear if the delayed rise would proceed in October.
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“It depends on what happens in the next three to six months, if the economy generally gets back on a good footing and elective surgery and dentists and everyone is open I would expect the premium uplift of three per cent from 1 October,” he said.
“But clearly if that doesn’t happen the industry has to be flexible.”
The average premium rise was due to be 2.92 per cent in 2020. Mr Drummond said the postponement of the annual increase had saved Medibank members $120 million or an average of $71 each.
Just before the April 1 rises were due to kick in, the Federal Government announced the postponement of the premium rises for at least six months to relieve financial pressure on consumers during the pandemic.
New figures showed of the fund’s 3.7 million membership base across the Medibank and ahm brands, only 1 per cent had requested a premium suspension for up to three months due to financial hardship.
Some elective surgery procedures and IVF were suspended in recent months, reducing the ability of Australians to use their policies for a period.
Since the COVID-19 outbreak Medibank has received about 24,000 applications to suspend memberships for up to three months.
But Mr Drummond said, “during the COVID-19 pandemic we are not going to profiteer”.
“Any permanent savings will go to consumers,” he said.
He confirmed no staff had been laid off so far as a result of the pandemic and instead they had to rapidly hire 500 temporary nurses.
The boom in telehealth – the use of digital information such as computers and mobile devices to access health care remotely – has also continued to grow.
Mr Drummond said recently telehealth services grew 50 per cent week on week and physiotherapy and psychology were the most popular services.
Medibank’s 83 stores remain closed until further notice and all the company’s staff – about 4000 – are working remotely.
Originally published as Private health insurance premiums are scheduled for October, Medibank boss says
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