Health funds’ fear of Dunkley delay on premiums rise sparks war of words with Mark Butler

Health insurers fear Labor is delaying a decision on how much to increase premiums in order to avoid a backlash before the Dunkley by-election on Saturday.

Anthony Albanese, in parliament above, and Peter Dutton rallied their respective parties in Canberra on Tuesday in their last meetings ahead of the by-election.

The nation’s biggest health insurers fear Labor is delaying a decision on how much to increase premiums for millions of Australians in order to avoid a cost-of-living backlash before the crucial Dunkley by-election on Saturday.

The Australian has spoken to six of the nation’s largest funds who say it is the longest wait on a premiums call from a government in 15 years, and they do not have enough time to notify their customers of any price increases if Health Minister Mark Butler does not make a decision this week.

Mr Butler rejected the claims, saying he had been forced to ask the health funds to resubmit their proposals for price changes in December and in late January, considering their “years of record profits and the declining proportion of premiums they return to customers”.

“With household budgets under pressure, it is important that to make sure that any increases are adequately justified and as low as possible,” Mr Butler told The Australian.

Health Minister Mark Butler. Picture: NCA NewsWire/Martin Ollman

Amid the health insurance row, Labor’s stage three tax cuts overhaul passed parliament on Tuesday night, with the Coalition rejecting a push by the Greens that would have delayed a vote until after Saturday’s by-election.

As Anthony Albanese and Peter Dutton laid out their messages to their MPs ahead of the poll in Victoria’s southeastern suburbs, insurers are increasingly anxious over Mr Butler’s refusal to tell them how much premiums will ultimately rise on April 1.

One senior figure in a major health fund, who wished to stay anonymous over fear of reprisals, said the government’s delay was “unheard of” and “weird”. “It has always been announced by now,” another source said. “There is concern from the industry that the longer they leave it the less notification customers will have if there is an increase coming.

“People are speculating that the government wants to wait until Dunkley is done. It’s all about Dunkley and cost of living. There’s so much pressure on health insurers to be careful on pricing. If we were to say something on the record, I’d be worried that there would be ramifications.”

Mr Butler’s decision is already more than three weeks later than the February 6 announcement last year, and months longer than the December announcements made between 2018 and 2021 under former Coalition health minister Greg Hunt.

Former Coalition health minister Greg Hunt. Picture: NCA NewsWire/Brendan Beckett

If the government waits until after the Dunkley by-election to announce the pricing increase it will be the longest delay in 15 years. However, if it announces the change before Saturday it would be the latest since 2016 when deputy Liberal leader ­Sussan Ley was health minister.

Anxiety is rising among health insurers who warn four weeks will not be enough time to notify members of price increases – which they are legally required to do under consumer law – especially considering it takes time to send letters to regional areas.

Health insurance premiums increase every year on April 1, however some funds were able to defer the rise until later in the year during the Covid pandemic given the deadline was not set in legislation. The pricing announcement delay comes amid growing speculation the government is withholding its review into reforming the aged care system until after the by-election.

The long-awaited report was due in January but has been shelved. It is likely to be contentious and recommend a move towards a user-pays system in order to ensure the sector is sustainable going forward.

The Coalition has seized on ­delays in private health and aged care, prompting opposition health and aged care spokeswoman Anne Ruston to accuse the government of “blatantly prioritising politics before people”.

Opposition health and aged care spokeswoman Anne Ruston.

According to Coalition figures, a significant number of people living in the electorate of Dunkley will be impacted by any increase to insurance premiums, with nearly 46 per cent of voters protected by health cover.

Senator Ruston called on the Prime Minister to be transparent with Australians and “come clean on how much more he intends for them to pay for important services like private health insurance and residential aged care”. “It is astounding that this government is not providing private health providers or the more than 14 million Australians with private health insurance enough time to adjust to possible premium changes,” which are due to come into effect in a months’ time,” Senator Ruston said.

Mr Albanese and Peter Dutton rallied their respective parties in Canberra on Tuesday in their last meetings ahead of the by-election, which was triggered after popular government MP Peta Murphy died in December following a battle with cancer.

Mr Albanese told caucus “there are still people out there who do not know about the tax cuts”. His comments came after The Australian published an exclusive Newspoll on Monday revealing only a negligible bump in support for Labor despite claims its revised tax cut policy would benefit millions of Australians during a cost-of-living crisis.

The latest poll showed the government failing to improve its position overall since December, with no apparent boost from last month’s tax cut announcement, which sought to redistribute income tax cuts for higher-income earners to lower and middle-income earners.

The late MP for Dunkley, Peta Murphy. Picture: NCA NewsWire/Gary Ramage

In the last caucus before the by-election, Mr Albanese accused the opposition of “not asking about the tax cuts” in parliament, because the party did not want attention turned on its own plans.

The Greens failed to send Labor’s legislation to a Senate committee, which would have taken four weeks to scrutinise the bill before a vote could be held. The minor party also released costings on Tuesday that showed axing the tax cut for people on more than $180,000 would save $79.4bn over the decade, which it argued could be used to cover dental services being put onto Medicare.

Mr Albanese said Jodie Belyea was “a fantastic candidate” but pointed out again that the average swing against a government in a by-election for a government-held seat since the Hawke era was 7.1 per cent, with Labor holding Dunkley by only 6.3 per cent.

The Opposition Leader told his party room the average swing in a by-election against a first term government was more like 1.5 per cent, with no first term government having lost a seat in a by-election since WWII.

Mr Dutton and other Liberals have reiterated that it will be a “hard ask” for the opposition to win the seat, and The Australian understands the party is aiming for a swing no less than 2 to 3 per cent. “If I had to put $100 on it today, it would be on a Labor win,” a Victorian Liberal said.