For the second time since November the health minister tells private funds they’re dreaming when it comes to big premium increases.
Federal health minister Mark Butler has rejected private health insurers’ bid for another round of premium increases.
Back in November the insurers asked for rises of between 5% and 6% from April this year, to which Mr Butler responded by telling them to try again, leading to a second round of requests made to the Department of Health and Aged Care earlier this month.
According to the Australian Financial Review, Mr Butler has again sent the insurers back to the drawing board, saying the requested increases were not “justified or proportionate”.
“Based on the resubmissions the Department of Health received, I am not inclined to currently approve their proposed premium increases,” Mr Butler was quoted as saying.
“I’ve written to a number of private health insurers and asked them to resubmit a more reasonable figure that is in the best interest for Australian consumers.”
Last year Mr Butler approved average premium rises of 3.03%, about half of what the industry had asked for.
Given the imminent federal election – tipped for early April – it seems unlikely Mr Butler will be willing to approve anything more than he can get away with without triggering a mass revolt by the insurers.
Ben Harris, director of policy and research at Private Health Australia, the body representing most private health funds, said “health funds and the government are working together to keep premiums as low as possible”.
“We know cost of living pressures are biting Australians hard, and we need to keep as many people as possible in private health insurance to keep pressure off the public system,” he told HSD.
“Health inflation is running hot at the moment, with health funds paying out 8-10% more last year than the year before. Costs for hospitals are increasing, and doctors are increasing their fees. It’s a tough environment, but we need to keep pressure off premiums.
“Everyone needs to focus on reducing costs for consumers. This includes keeping premiums as low as we can, which can only happen if we reduce waste and low value care, improve efficiency and increase price transparency.”
Meanwhile, leading not-for-profit hospital operator Cabrini Health has negotiated a new long-term agreement with the Australian Health Service Alliance – a member-owned insurance group including 29 small to medium insurers, such as GMHBA, Defence Health, HBF, Police Health, Teachers Health, and Uni Health.
The two organisations reaffirmed their multiyear agreement, which ensures all eligible customers of the AHSA member funds can continue to access Cabrini Health services.
Cabrini operates hospitals in Malvern, Brighton and Elsternwick in Melbourne.
“Our core belief is that healthcare should be driven by the needs of the patient,” said Cabrini Australia Group director for Health Funding and Patient Services, Cathy Ryan.
“We are pleased to extend this relationship for three more years to ensure our doctors and patients can rely on us for quality care.”
AHSA chief executive officer, Andrew Sando, said:
“Cabrini Health’s collaboration with the not-for-profit health fund community and their commitment to patients and Victorian healthcare professionals is to be commended.
“The strength of Australia’s private healthcare system is rooted in patient and member-centric values. Safeguarding the integrity of our sector and collaborating to deliver the best possible outcomes, has never been more important.”