Private health cover at 11-year low

The proportion of the population with private hospital cover is the lowest it has been in 11 years.

Health Minister Greg Hunt. Picture: AAP

The proportion of the population with private hospital cover is the lowest it has been in 11 years, despite federal government reforms aimed at making policies more affordable and transparent.

With only 44.6 per cent of the population covered, and premiums to rise again next month, the Coalition will go to the election unable to stop the exodus and with Labor promising a cap on premium increases and a Productivity Commission inquiry.

The Australian Prudential Regulation Authority data yesterday showed another 12,370 ­people dropped their cover in the December quarter, leaving insurers with the lowest share of the population since September 2007.

Insurance lobby Private Healthcare Australia yesterday called on both sides of politics to commit to further reforms to ease industry cost pressures.

“Health funds are committed to delivering value for their members but there is no pot of gold,” chief executive Rach­el David said.

The PHA wants the insurance rebate restored to 30 per cent for low- and middle-income earners or, at a minimum, eroded no further. Labor tied indexation to the rate of inflation, not the higher rate of premium increases, meaning the base rate has fallen to just over 25 per cent.

While the Coalition had vowed to restore the rebate once the budget allowed, Health Minister Greg Hunt has made no commitment to further reform.

Labor health spokeswoman Catherine King wants to strip the rebate from public hospital-only policies — insurance is intended to take pressure off public waiting lists — but otherwise leave it to the inquiry to consider. “We would be very sceptical of any recommendations that did actually lower the affordability of private health insurance,” she said.

Mr Hunt approved premium increases averaging 3.25 per cent but has yet to respond to a review of out-of-pocket costs.