| Publication: | The Sydney Morning Herald |
|---|---|
| Date: | 2 March 2009 |
| Section: | Breaking News National |
Melissa Jenkins, 2 March 2009
Private health insurers have been given the go-ahead to increase premiums by an average of about six 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.
The 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.
Some 44.8 per cent of Australians have private health insurance.
Ms Roxon acknowledged the six per cent increase would put a strain on household budgets.
"Any increase puts pressure on families," she said.
"However, the government was determined to restrict increases to the minimum necessary to meet legal requirements, including maintaining the solvency of insurers."
Ms Roxon said she knocked back applications for larger premium increases from several funds.
"Without that close scrutiny, premium rises would have been higher for up to eight million Australians," she said.
"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.
Premiums rose by an average of 6.63 per cent in the last five years of the Howard government, Ms Roxon said.
Medibank Private will lift premiums by an average of 5.74 per cent, which equates to about $1.40 a week.
A Medibank spokeswoman said that with the fund's health costs running at nine per cent and utilisation continuing to climb, the increase was responsible.
"Medibank is endeavouring to shield members from the full impact of rising costs through responsible management and smart purchasing of health services," she said.
"With global economic conditions producing investment losses and a slowdown in membership growth, 5.74 per cent represents a prudent balance between ensuring we can cover the costs of claiming and keeping health insurance affordable."
