Following yet another anticipated move by private health insurers to, again, increase premiums on hard working Australian families, the Federal Government has rebuffed the call in its strongest terms yet.
The Government has announced it will place the consumer at the forefront of its plans to lower the cost of private health insurance and stem the avalanche of Australian families leaving their private health policies.
The announcement comes as the Sydney Morning Herald (SMH) reported the results of a YouGov poll of 1000 people which suggested that “three-quarters of Australians want the minister to ‘force private health insurers to use some of their $1 billion in profits to keep premium increases under 3 percent next year.’”
The lobby group representing the corporate insurers, Private Healthcare Australia (PHA), told the SMH private health insurers were battling rising costs that were squeezing its profit margins – with some funds in “negative territory” – making the minster’s request for a 3 percent rise “incredibly challenging”.
The PHA has been quick in its attempts to shift blame by attacking other industries, including medical devices companies, despite millions of dollars in savings being delivered by devices companies to corporate insurers through its landmark ‘agreement’ with the Federal Government.
Since 2016, the agreement has delivered price cuts to thousands of implants like heart pacemakers, knees, hips and eye lenses to corporate insurers.
However, despite these savings, the Big 3 corporate health insurers – Medibank, Bupa and NIB – have continued to raise their premiums at twice the rate of inflation over the same period, and rake in profits of nearly $1 billion between them.
Last week PulseLine published a story covering the medical device industry’s calls to reject ‘Big 3’ health fund increases over 3 percent, following the release of data from Australian Prudential Regulation Authority (APRA).
Federal legislation requires corporate health insurers to submit their premium increases in November each year for APRA. The legislation also gives the government the power to reject premium increases that are not in the “public interest”.
Medical Technology Association of Australia CEO, Ian Burgess, said “any attempt by insurers to claim premiums should rise by over 3 percent next year – twice the rate of inflation – is a sham and a scam”.
“It’s in the public interest for APRA to ensure the Big 3 health insurers pass on every cent of these medical devices saving to their customers through lower premiums as promised – and throw every book available at them if they don’t.” Mr Burgess said.
Minster Hunt has written to the 20 corporate health insurers rejecting their increase request, and also rejected their claim they couldn’t afford to no increase premiums on Australian families by an average of 3 percent.