There’s an annual charade around the rising cost of private health insurance, and it’s orchestrated by the federal government and the private health funds.
Each year, the federal Department of Health and the 30-odd private health insurers enter into months of negotiations, where the latter lobby for increases on the amount they want to charge on each health insurance product they sell. When agreements are struck on the price increases that can apply to the range of products offered under hospital or extras cover, the federal health minister and the health funds then make grand announcements.
Bitter pill: your health insurance premium is rising, but are you paying more than the average policyholder?
This is where the charade begins. The health minister announces the average cost by which private health insurance premiums will rise. From April 1 this year, the average increase across all health funds’ premiums will be 3.03 per cent.
Federal Health Minister Mark Butler was quick to point out this was less than last year’s annual wages growth of 4.2 per cent and inflation of 4.1 per cent. “While we know that any increase will be hard to bear during a global cost-of-living crunch, the Albanese government has ensured that health insurance premiums will fall relative to Australians’ wages ...”
As stated, the 3.03 per cent is an average. What wasn’t said was that many of the 15 million Australians with private health insurance will be slugged with increases between 4 per cent and 6 per cent.
In the past week, many private health insurance customers have received letters by email or mail informing them of their premium increases that come into effect next month. For many, the premium increases will be above last year’s annual average wages growth and inflation.
A quick straw poll of more than a dozen work colleagues found only one whose private health insurance premium grew at or less than that average of 3.03 per cent.
The next part of the charade is when the funds individually put out announcements about how much their premiums will go up for policyholders and, guess what, it’s an average. For Medibank Private the average was 3.31 per cent, BUPA 3.61 per cent, HCF 2.89 per cent, and NIB 4.1 per cent.
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