Private health insurers increase premiums to support profit
Yesterday marked the beginning of yet another round of private health insurance premium increases. Australia’s official inflation rate is 1.43%, yet insurers have jacked up their premiums by 2.92%. Corporate health insurers are increasing their premiums, not to increase patient outcomes, but rather to line their own pockets.
APRA’s mandatory private health insurance reporting data shows in the three months to June corporate health insurers raked in gross mega-COVID-profits of $1.03 billion, and this is after they brought forward $1.4 billion in distant future claims and a 15.8% rise in their Management expenses. Management expenses, which include employee bonuses, are now at a record high of $650.1 million every three months.
The Federal Government and the MedTech innovators are doing all they can to play their part in trying to reduce the rise of insurance premiums. MTAA and Minister for Health, Greg Hunt, signed an agreement in October 2017 that is saving private health policy holders $1.1billion in payments for medical devices over the next four years.
Unfortunately, despite Private Healthcare Australia (PHA), the private health insurance lobby group, claiming a reduction in device prices would lead to a decrease insurance costs, corporate health insurers have continued to jack up their prices and squeeze struggling Aussie families. It is now clear that savings need to be made within the insurer’s internal processes - nothing else will reduce premiums.
Professor of Health Economics at the University of Melbourne, Yuting Zhang, recently wrote “the reasons insurance companies are using to justify this price rise don’t stack up.”
It is important to note that not all insurers have jumped on the PHA profit plan. HBF and some smaller funds have done the right thing; they have abandoned their proposed premium increases. They know, during COVID it is not the time to profiteer off the backs of Aussie families.
Medical Technology Association of Australia (MTAA) CEO, Ian Burgess, has called on corporate health insurers to ditch their premium increases and return the money to families who need it the most.
“MTAA and the Government delivered $1.1 Billion in savings, now is the time to pass this on in full: insurers must forgo their premium increase, give money back to Aussie Mums and Dads – it’s time they put people before profits.”