Private health insurers were forced into stopping price hikes

Private health insurers finally revealed they were pausing premium hikes just day before costs were due to rise, but it’s not going to stop members from dropping cover.

GREEDY private health insurance funds have a lot to answer for.

The timing of their annual price hikes on April 1 couldn’t have been worse.

Right, smack bang in the middle of all hell breaking loose with the COVID-19 outbreak and they were about to jack up their costs.

Admittedly this isn’t their fault – April 1 is the date premiums rise every year, but it certainly wasn’t going to bode well if they proceeded.

But this needs to be pointed out – it was only days before their hikes were scheduled to happen that I’d worked on a story with a colleague questioning funds on whether the rises would continue. And, you guessed it, yes they were.

This year premium rises were scheduled to increase by an average of 2.92 per cent.

There was only a handful of health insurers who refused to do this including Perth-based fund HBF.

Their chief executive officer, John Van Der Wielen, told me on March 26 that his 1 million members should throw their premium rises in the bin.

He confirmed they would be keeping their premiums the same price for the next 12 months.

Private health insurance premium hikes that were due to kick in on April 1 have been paused for at least six months.

Then on the Sunday – just three days before the hikes were due to kick in – Federal Health Minister Greg Hunt revealed the funds would be postponing their price hikes for at least six months.

Finally, the funds were forced to come up with the goods and give millions of members a bit of a breather.

Prior to this, many funds had rolled out a series of COVID-19 measures in recent weeks but left out the biggest one – freezing premium hikes.

I just paid my private health cover for the next 12 months to avoid any price hike and it’s no small amount to be sneezed at.

I shelled out nearly $3000.

And let’s not forget there’s now bans on all non-elective surgeries, which will save the funds billions of dollars.

So they can’t have it both ways – hiking premiums and members not being able to use their policies for what many have them for in the first place.

Some optometrists and dentists have also shut their doors – another key component covered under private health extras cover.

Private health insurers have been on the nose for a long time now, losing members every quarter as households ditch their cover in droves.

For many Australians, private health cover seems like a huge cost with little return.

I’ve always had private health cover and don’t plan to ditch it, ever, but I’ve got to say these funds are going to face a huge battle now as undoubtedly more people drop it, an expense they can no longer afford.

@sophieelsworth

Originally published as Private health insurers were forced into stopping price hikes