Another hit to health insurance costs underlines need for real reforms

The latest above-inflation rise in health insurance underlines the need for more effective and longer term reforms to deliver better value for people who have private health insurance, the Consumer Health Forum says.

“While we welcome the modest decline in this year’s rise compared to previous years, it is still about three times above the inflation rate and will hit families with another $200 a year or more increase in their costs,” the CEO of the Consumers Health Forum, Leanne Wells, said.

“When most Australians are seeing little increase in their incomes and given  the continuing complexity and uncertainty of health insurance coverage, many people will be thinking twice about their cover.

“Premiums have been rising relentlessly above inflation every year for the past 17 years.  At the same time, the coverage of many health policies has tended to shrink. It is time for the Federal Government to take real action to keep health insurance costs within reach of average income earners and to make policies more consumer friendly.

“With many families now facing premiums of around $5000 a year, it is unacceptable to maintain a regulatory system that results in people holding complicated and uncertain policies for coverage of a declining range of services.

“That is why the Consumers Health Forum is urging the Government to use the health insurance rebate to drive system improvements.

“Health insurance policies should be simpler, making it easier for consumers to compare different fund offerings and obtain best value.  The rebate should only apply to polices that cover necessary, evidence-based procedures and services.

“The private health insurance industry has had years of buoyant returns with the help of many billions of dollars in taxpayer financed subsidies while consumers have been hit with big premium rises years after year.

“It’s time for the balance to be restored in favour of the consumer,” Ms Wells said.

“We welcome Minister Hunt’s acknowledgement of the cost of living pressures on families and his pledge to work with insurers to deliver more value for customers without compromising the quality of cover.   Any reforms to Australia’s private health insurance arrangements need to meet the consumer value test.  That’s why it is important that the consumer community is centrally involved in designing new policy in this area of our health system”.



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Mark Metherell
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