Health Insurance :: Private health insurance premiums increase

In Australia, figures released by the Private Health Insurance Administration Council (PHIAC) show that as a result of benefits paid to patients and rising health service costs, private health premiums will increase by an average of 4.5 per cent from 1 April this year.

In 2005-06, private health funds paid $6.35 billion in hospital benefits to members, an increase of 8.2 per cent compared to the previous year, which is over 85 per cent of total hospital premiums paid by members.

An average 4.5 per cent increase would raise the cost of a combined hospital and ancillary policy for a family by about $2 a week, after allowing for the 30 per cent rebate. Individual fund members? rates will differ according to their policy.

This is the lowest increase across all private health insurance funds since 2001. For the first time, 18 funds will have increases less than the Consumer Price Index (3.9 per cent).

The Commonwealth Government has carefully scrutinised all applications to ensure the premium adjustments are the minimum needed to maintain fund solvency requirements and that the funds can meet their claims obligations to members.

The six largest funds, covering eight out of ten members, were submitted to a further assessment by the Australian Government Actuary. After discussions with PHIAC, three large funds reduced the increase sought.

PHIAC will continue to monitor the management expenses of funds with a higher than average management expense ratio.

The vast majority of funds are prudent managers with administration expenses less than 10 per cent. Members are entitled to expect that their funds keep management costs as low as possible to ensure that premiums remain as low as possible.

More than ever, consumers can shop around for better deals on price and, after the Government?s cover reforms are introduced on 1 April, on product. The 30 per cent rebate is worth over $1,000 to an average family.


Do NOT follow this link or you will be banned from the site!