Private health premiums to rise 6 per cent

Article excerpt:

PRIVATE health insurers have been given the go ahead to increase premiums by an average of about 6 per cent from April 1 this year, Federal Health Minister Nicola Roxon says.Premiums rose by an average of 4.99 per cent last year.

Health funds had warned premiums could rise by as much as 10 per cent, arguing the Rudd Government's changes to the Medicare levy surcharge last October would spark an exodus of members.But in the three months to December 2008, private health membership grew by 54,000 people, or 0.1 percentage points, to hit its highest level in seven years.

Under the changes to the surcharge, the income levels at which the tax kicks in for people without private health insurance rose from $50,000 to $70,000 for singles, and $100,000 to $140,000 for couples.

Article summary:

• Ms Roxon acknowledged the 6 per cent increase would put a strain on household budgets: "Any increase puts pressure on families, however, the Government was determined to restrict increases to the minimum necessary to meet legal requirements, including maintaining the solvency of insurers.''
• "This year's increase is the result of increased benefits paid to patients, rising health service costs, and investment losses from the global financial crisis.''
• The increase would on average raise the cost of a combined hospital and general treatment policy (ancillary or extras) for a family by about $3 a week, after allowing for the 30 per cent rebate.

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