Mr Burgess said over 2 million Australians dumped their private health insurance in the last five years and this week’s December quarter APRA figures confirmed this trend was continuing, with only 44.0% per cent of the country now covered.
At the same time, the APRA data shows private health insurance profits before tax increased 14 per cent over the past 12 months from $1.6 billion to $1.8 billion.
This is despite the price of medical devices paid by private health insurers dropping by up to 38 per cent in the past 3 years thanks to government reforms, including another round of recent price cuts on 1 February 2020 for technology treating heart and lung disease, diabetes, bone cancer, severe arthritis and eye trauma.
“It’s clear private health insurers would rather drop customers than drop their prices and profits,” Mr Burgess said.
“Private health insurance premiums have grown faster than national house prices over the past decade.
“It’s a safe bet that the first private health insurer whose premiums go below zero will increase their market share overnight.
“Surely that’s a better investment than health funds spending more on marketing to squabble over fewer customers?
“Private health insurers haven’t paid one extra cent for medical devices over the past two premium years, despite raising premiums twice-inflation and banking nearly $1 billion in profits between the big corporate health funds.
“The number of Australians dropping out of private health insurance is quickly snowballing into an avalanche and it’s time for government to step in and save private health from itself.”
A recent Alpha Beta report identified $1 billion worth of efficiencies that could reduce private health prices by up to 20 per cent within 3 years if government adopted them now.